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French govt could drop fourth mobile licence

The French government is considering shelving plans for a fourth mobile telecommunications license despite the revenue an auction would generate, a senior government official told Dow Jones Newswires Thursday.

"In every country where there's a fourth mobile phone license, it's not working, the business model is not valid," the official said, without elaborating.

"The only company that bid during our auctions actually couldn't afford it," the official said, referring to French Internet provider Iliad. The company has repeatedly expressed its interest in acquiring France's fourth mobile network license.

French telecommunications regulator Arcep rejected an application for the license made by Iliad subsidiary Free Mobile in October, as it didn't meet the financial criteria.

Iliad wanted a reduction or step payment of the EUR619 million license fee.

Following the collapse of the process, Finance Minister Christine Lagarde said all options remained open for the future attribution of the country's fourth and last third-generation, or 3G, mobile license.

The French government has since amended the legislation through a parliamentary vote to enable it to set new terms for the license by decree. A spokesperson for the French Finance Ministry told Dow Jones Newswires at the time that "approving the amendment was a way of keeping the options open on this license."

The country's three established mobile network operators control 96% of the mobile phone market. These are, in descending order of market share, France Telecom SA's Orange; SFR, co-owned by Vivendi SA and Vodafone Group PLC; and Bouygues Telecom, a subsidiary of Bouygues SA.

The French government faces a widening budget deficit and mounting debt - issues the proceeds of a license auction could go some way to alleviate. According to European Union regulations, the proceeds of the sale of a communications license can go straight into the public purse.

But the government official said Thursday that instead of an auction for a fourth mobile license,"we could make a deal with the current mobile phone operators" which would make a fourth license unnecessary, without elaborating further.

SFR, Bouygues Telecom and France Telecom all declined to comment on the matter.

Источник: Total Telecom

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