COLT, the telecoms group majority-owned by Fidelity, has insisted that it did not bid too much in a recent auction of spectrum licences, despite paying 30 times more than some of its rivals.

Ofcom, the telecoms watchdog, revealed yesterday that during a sealed-bids auction, COLT paid £1.5 million for a licence, while its rival Cable & Wireless bid £51,002. BT paid only £275,000 for an identical licence for the spectrum, which is used for running small-scale mobile phone networks. Spring Mobil, the lowest successful bidder, secured another identical licence for £50,110.

COLT confirmed that it was provided by Ofcom with the same information about the spectrum as the other bidders. A company spokeswoman said that it was “certainly not” embarrassed about the payout.

“We are perfectly comfortable with what we paid. The value of the opportunity for COLT is well in excess of our bid and was firmly based on our business case for the licence. COLT’s assessment was that a lower bid would risk losing a licence.”

COLT, like the other 12 successful bidders in the auction, learnt only yesterday what its rivals had paid. Any company that decided to pull out after the close of the auction but before the licences were awarded would have lost its deposit, equivalent to half its highest bid.

The licences — for the frequences 1781.7 to 1785 Mhz, paired with 1876.7 to 1880 Mhz — had a reserve price of £50,000. Two companies, including Orange, the mobile phone group, were knocked out after bidding only the reserve price.

The auction, which was held last month, raised £3.8 million for the Treasury. It was the first to be conducted by Ofcom and kicks off a series of auctions that could raise billions for the Government.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts