***French Mobile Phone Contest Closes
(January 31)
According to the Agence France Presse, the French sale of next-
generation mobile phone licenses has closed with only two
contenders for four concessions, and the regulatory body said it
would like a re-run to attract more candidates. The left-wing
government had planned to raise huge sums from license sales to
help finance state pensions, but many potential bidders dropped
out owing to the cost, provoking a political row.
France stands to reap only 9.9 billion euros (9.1 billion
dollars), half the expected amount, from the sale of franchises
using the third-generation Universal Mobile Telecommunications
System, which will allow high-speed multimedia services.
The French telecoms regulator said France Telecom and SFR, the
mobile phone unit of Vivendi Universal, were the only applicants
when the deadline for filings closed at midday. The Authorite de
Regulation des Telecommunications said it would like to see
another "call for candidates" to encourage competition among
operators and to uphold the spirit of European directives.
Two other telecoms groups had backed out of the race, complaining
that the 4.95-billion-euro price of a new license was too high.
One of the disgruntled groups, Bouygues Telecom, said it would
consider re-applying if the government set a new sale. But the
company denounced what it called were "discriminatory conditions"
of the sale, as they reinforced the dominant position of France
Telecom. Bouygues complained that the government had set the
price tag without taking into account differences among the
potential candidates, whose customer bases were not comparable.
Bouygues Telecom is the only holder of a second-generation Global
System for Mobile telecommunications (GSM) license not to seek a
UMTS franchise, which will leave it behind its competitors, which
will have superior technology. The company, which is the smallest
of the mobile phone operators, said it would use developments in
GSM technology to deliver multimedia services.
State-controlled France Telecom said it filed its application, 24
hours after a submission from the number-two cellphone operator
SFR. The company is the largest mobile phone operator by virtue
of its former status as the monopoly operator.
For France Telecom and SFR, the lack of competition would create
a duopoly, which would allow the two operators to strengthen
profit margins in the mobile phone market.
French-Spanish consortium ST3G, formed by Suez Lyonnaise des Eaux
and Telefonica SA, had already announced on January 24 that it
was not participating because the price was too high.
Wave Issue 0106 2/2/01 Article 5-01