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French minister lays out 4G spectrum auction detail

17 мая 2011

French Industry Minister Eric Besson Monday set out the details of France's upcoming fourth-generation mobile spectrum auction, which should raise at least EUR2.5 billion for the government and shape the competitive landscape in Europe's third-largest telecoms market.

The government has set the minimum price for the frequencies, which will be divided into different lots, at EUR2.5 billion, Besson said in a speech during a visit to an Alcatel-Lucent SA research lab outside of Paris."...The strategic asset that these frequencies represent won't be sold on the cheap," Besson said, confirming earlier media reports.

France is finalizing the long-awaited auction process of the fourth-generation, or 4G, spectrum, which should be launched at the end of the month, Besson said.

For operators it is crucial to get a share of the mobile broadband spectrum to cope with the rapid surge of data traffic on the web. The 4G frequencies will allow operators to upgrade their networks so that consumers can surf the Internet and download videos onto their mobile phones at high speeds, an increasingly important selling point for telecoms operators.

Once the tender offer is officially launched, operators have until September to file their bids and the government has set limits on how much spectrum one operator can bid for.

There are four lots of frequencies available, from the higher quality 800 megahertz band, for a minimum of EUR1.8 billion in total, and 14 lots from the lower quality 2.6 gigahertz band, for a minimum of EUR700 million in total.

Besson said he wants the auction to attract bids from a wide range of French telecoms companies. As a result, a sole operator won't be able to bid for more than half of the total amount of frequencies available on the 800Mhz band and 15Mhz out of the total 70Mhz available on the 2.5Mhz band."Conditions for allocation have never been as favorable to competition," the Minister said.

France isn't the first country to impose caps on how much spectrum one operator can acquire. Other countries, such as Spain, have also said they will impose caps to allow smaller operators to acquire some spectrum and to respect fair competition.

India and Germany have recently raised $8.23 billion and EUR4.38 billion, respectively, from spectrum auctions while Spain's industry ministry April said it planned to raise between EUR1.5 billion and EUR2 billion through the auction of 4G spectrum.

In France, results of the 2.6Mhz spectrum auction will be announced in October while the results of the 800Mhz auction will be revealed at the start of 2012, Besson said.

France Telecom SA, Vivendi SA's SFR and Bouygues's telecom unit all have third-generation mobile licenses while Iliad SA last year was awarded France's fourth 3G license and is due to launch mobile services next year.

All operators, including those who don't yet hold a mobile license, will be able to bid for 4G frequencies and they will probably be interested in acquiring some as no more will be sold for at least another ten years.

Once complete, the auction is an opportunity for network gear suppliers such as Alcatel Lucent and Telefon AB L.M. Ericsson to undertake network upgrades for operators.

Источник: Total Telecom

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