ERMES-auction in Germany

The process of introduction of the European paging standard ERMES (European Radio Messaging System) in Germany is described, and technical and market conditions are briefly discussed. The main focus is on the design of an appropriate auction mechanism for licenses and frequencies, on its implementation in Germany and on the results achieved. The auction that took place in September 1996 represented the first simultaneous multiple-round auction in the European Telecommunications market. The following lessons can be drawn from the development and outcome of the German ERMES auction: 1. Auctioning licenses, frequencies or, more generally, rights in the telecommunications sector has been proven an innovative and efficient awarding mechanism. 2. The specific auction rules as well as the whole procedure, including preliminary checks of participants, and software design, can be developed by European specialists.