The £22.5 billion sterling (€22.56 billion) raised from the auction to allocate third generation mobile phone licences in the UK has prompted huge interest in mobile telephony and intense debate on the best way to allocate licences.

While the huge sums collected from telecoms operators in Britain undoubtedly satisfied the Treasury, the consequences for telecoms operators and customers are not clearcut.

Some successful telecoms operators have warned that the huge licence costs will ultimately have to be recouped by charging higher prices to consumers.

Many have also warned that imposing such large upfront payments for licences could delay the roll out of a network.

Analysts remain divided over these issues.

Some agree that the expense of the licences would be borne by consumers while others argue that it will prompt operators to roll out networks as quickly as possible and to offer competitive prices to generate revenue. But the Irish telecoms regulator, Ms Etain Doyle, was not persuaded by this argument.

She pinpointed the "potential impact an auction procedure may have on prices" for choosing a beauty contest as the means for determining who would receive licences here.

This will satisfy most of the domestic operators who feared the high costs associated with a UK-style auction.

Shortly after the UK sale, credit ratings agencies such as Moody's warned the high cost of licences could lead to a significant rating pressure on the credit quality of some European telecoms companies and share prices in the sector fell heavily.

Further alarm was caused for operators amid media reports that French regulators and the government there was considering changing the preferred method of allocation from a "beauty contest" to an auction where the highest bidder wins.

However, a compromise was adopted to impose a fixed cost for the five licences of €20 billion.

But within the past month telecoms operators have also moved to counteract the huge costs associated with auctions.

Earlier this month, KPN Mobile announced a strategic partnership with Japanese giant NTT DoCoMo and Hong Kong conglomerate Hutchison Whampoa to jointly tackle the 3G markets in the UK, Germany, France and Belgium.

Such strategic alliances and the fast pace of consolidation within the European telecoms sector have reduced competition for 3G licences and lowered the potential revenue gained from auctions.

The Dutch auction which ended earlier this week raised only 5.9 billion guilders compared with the 20 billion guilders Dutch Finance Minister Mr Gerrit Zalm had mooted in April.

The German telecoms regulator said recently the cost of third-generation mobile communications licences in Germany, due to be auctioned on July 31st, would fall significantly short of the £22.5 billion sterling raised in Britain.