The first day of bidding for Holland's third generation mobile phone licences was overshadowed yesterday by the last-minute withdrawal of two contenders.

Just six groups are still in the running in the auction for the five UMTS licences on offer. That boosted industry hopes that the auction will prove less expensive than expected.

At the end of the day the Dutch mobile phone group Libertel was well ahead of the other groups, bidding €45.4m (£30m) for one licence.

Other bidders were more cautious with newcomer Versatel offering €200,000 for another of the licences while the top bids for the remaining three were all at the €100,000 level.

Bidding is expected to quicken over the coming days but analysts believe the final tally could fall well short of the 20bn guilders (£5.7bn) which some had expected.

The two companies to pull out yesterday were Hutchison 3G Netherlands and Nogenta Swedish Acquisitions, which is owned by NTL.

NTL said its decision reflected consolidation within the industry. France Telecom owns 25% of NTL and 80% of Dutchtone, another bidder.

The Hutchison move is seen as confirmation that it, Holland's KPN Telecom and Japan's NTTDoCoMo plan to bid jointly for third generation licences across Europe.

"The withdrawals support our view that UMTS costs are unlikely to be as high as ther market had been anticipating. This is very positive for the sector," said Bear Stearns analyst Fanos Hira.