The twelve low-power GSM licences sold by Ofcom this week have gone for a total of £3.8 million, but two-thirds of that came from two bidders who paid more than a million, while the other ten made eBay-style bids averaging about £125,000.

Colt Telecom's £1.5 million bid valued the licence highest, with enterprise phone system vendor Teleware's £1 million bid coming second. At the other end of the scale, Sweden's Spring Mobil paid a cheeky £50,110 and Cable & Wireless paid a canny £51,002 to knock out bids from Orange and Zynetix, at £50,000 each.

Whatever they paid, the lucky twelve will now share the two bands, 1781.7-1785MHz and 1876.7-1880MHz, on equal terms. They can all offer short-range, low-power GSM cells anywhere they like in the country, as long as they agree to a code of practice in case of interference.

The "pico-cells" will let any mobile handset roam onto a cheap indoor network, providing cheap fixed-mobile convergence, without the need for expensive dual-mode handsets that include Wi-Fi. They should also offer reliability, since the bandwidth is shared between a limited number of users.

All the operators are likely to offer a service to first at businesses, who will be able to buy GSM-enabled IP phone exchanges, that will reduce their in-office mobile bills (about 30 to 40 percent of the total business mobile bill, according to most estimates) to zero.

Although this is Ofcom's first "technology neutral" auction, no-one expects any other technology than GSM to be offered - with around 50 million terminals in circulation ready to pick it up, it's a no-brainer.

It's also the first auction since the 3G licences which went for £22.5 billion in 2000, a level which no-one expected this one to reach. Most predictions were for a total of a few million - but the variation in prices may surprise some.

"Our customers are multinationals, and this will be an enabler for us to offer fixed-mobile convergence services right across Europe," said Colt's commercial director, Robin Saphra. If low-power GSM takes off, Colt should have no trouble getting its money back, but its ambitious plans to go Europe-wide will depend on other regulators in Europe offering low-power GSM spectrum also.

The prices paid:

  • British Telecom £275,112
  • Cable & Wireless £51,002
  • Colt £1,513,218
  • Cyberpress (Pipex) £151,999
  • FMS Solutions £113,000
  • Mapesbury Communications £76,660
  • O2 £209,888
  • Opal Telecom (Carphone Warehouse £155,555
  • PLDT £88,889
  • Shyam Telecom £101,011
  • Spring Mobil AB £50,110
  • Teleware £1,001,880