Europe's 3G mistake

European governments have made a fundamental mistake with the auction of third-generation (3G) mobile licences, according to a leading technology academic.

Nicholas Negroponte, founder and director of the Massachusetts Institute of Technology Media Labs, said the prices paid for 3G licences were far too high as the auction did not occur in a genuinely free market.

"The UK auctioned the 3G spectrum and got seven times more than it anticipated. The Government was gloating. The Germans did the same and did it worse," he said.

European telecoms firms paid out £100bn to secure 3G licences, but nationally based firms such as BT could not exist without licences, so the auctions were not a genuinely free market, said Negroponte.