3G licence

Only one bidder for 4th French 3G licence

Paul Rasmussen — Fri, 23 Oct 2009 12:09:21 -0400

The proposed sale of the fourth French 3G licence has descended into near farce as those supposedly keen to bid have walked away leaving the ISP Illiad as the only interested party. The deadline for applications is the 29^th October, although observers believe the likelihood of a fresh candidate appearing is remote at this stage.

Numericable and Virgin Mobile France, which previously said they were discussing options to jointly bid for the licence, have now jointly decided that unfavourable regulations and uncertainty surrounding the overall Capex requirements had forced them to reject any idea of bidding. This move follows decisions by Egypt's Orascom Telecom, the French investment company Bollore and the local alternative telecoms operator Kertel to also abandoned plans.

Speaking on behalf of Virgin Mobile, Numericable CEO, Pierre Danon, said that the two firms had spent a considerable amount of time exploring the opportunity provided and in talking to the three incumbent cellcos, but had decided that "given the conditions on the licence, we think it will be very difficult for the holder of the fourth licence."

Under the terms of the licence award, the successful bidder is required to build a network to cover 25 per cent of the French population before it can reach a roaming agreement with other operators. Danon claimed that the uncertainty over the timeframe and costs related to hitting this target made it too risky to proceed. "The newcomer will need some 1,000 antennas to reach that threshold. It would have to install the antennas at new locations or on the sites of existing operators, effectively increasing the risk and costs associated with the project. The business case for the project could entirely fall apart, and the level of uncertainty is very high."

The lack of interest in this 3G licence will potentially embarrass the French government, together with the three existing 3G operators who have each complained bitterly about the low-cost of entry for this fourth operator.

However, the frequencies that make up the fourth 3G licence represent only about a third of the frequencies that the three established operators were allocated with their licences back in 2001 and 2002. Two more sets of frequencies will be auctioned in a second phase and will be open to all parties, including the three existing network operators.

For more on this story:
Total Telecom

Fourth French 3G licence consortium could include Orascom

Paul Rasmussen — Wed, 07 Oct 2009 13:36:20 -0400

While attention within France centres around the resignation of France Telecom's deputy CEO following a spate of suicides within the company, unconfirmed reports claim that Orascam Telecom has quietly sounded out the possibility of joining a consortium to bid for the fourth French 3G licence.

Orascom Telecom, backed by the Egyptian entrepreneur Naguib Sawiris through his Weather Investments holding company, has previously made plain his ambitions to enter the French cellular market and is reported to have approached the Numericable-Virgin Mobile consortium about a potential investment.

Naguib Sawiris, who has a reputation for the unconventional, is said to have offered to buy into the Numericable-Virgin Mobile grouping following ‘fruitless talks' with Iliad and Bollore Telecom over a possible tie-up.

Orascom Telecom was linked with a possible takeover of another French mobile operator, Bouygues Telecom, in 2007.

For more on this story:
Telegeography

New French 3G licence gets ugly - operators complain to EU

Paul Rasmussen — Wed, 02 Sep 2009 13:50:55 -0400

Vivendi has joined the list of French mobile operators planning to lodge a formal complaint with the EU over the €240 million price tag set by the French government for the country's fourth 3G licence.

Having paid €619 million for the original 3G licences, the existing operators believe the new pricing is effectively providing state aid to the fourth operator relative to the other three licence holders. Martin Bouygues, the CEO of Bouygues Telecom--France's third-largest mobile phone operator--said that "we would consider it normal that we should receive a repayment," if the sale goes through on this basis.

The chairman of SFR's parent company, Vivendi, Jean-Bernard Levy, said that after paying €619 million for their licences, existing network operators (Orange, SFR and Bouygues) feel they have been subjected to unfair treatment as the government is now selling spectrum at below market value. "Does France really need a fourth operator while several other countries are moving from four to three? It has just happened in Australia, is imminent in Spain and the UK and may take place in the US."

The deadline for applications for the licence is set for Oct. 29, with the licence to be awarded around eight months later.

Likely bidders for the new 3G licence include the ISP operator Illiad, MVNO Kertel, cable operator Numericable and Egypt's Orascom Telecom. Orascom has indicated that it wants to expand its operations into France and has said it is ready to "ally itself with one of the candidates."

This stance has also been proposed by Bollore Telecom, claiming that it would be unreasonable to start trying to acquire the fourth licence alone. "If people want us to join them, we'll study the possibility, but that's not the case for the moment," said CEO Vincent Bollore. The company has also clarified its position regarding its 20 WiMAX licences--which it no longer wishes to sell--but instead offer the 3.5GHz spectrum as backhaul capacity to mobile operators.

For more on this story:
Telecom Paper and Total Telecom

Orange to protest pricing of new French 3G licence

Paul Rasmussen — Wed, 05 Aug 2009 13:44:11 -0400

France Telecom Orange plans to lodge a complaint with the EU over its annoyance that the French government plans to offer a fourth 3G licence for around a third of the amount which it had to pay in 2001. The company said that it would strongly contest the licence fee of €240 million, claiming that the French government was effectively providing state aid to the fourth operator compared to the other three holders of 3G licences.

Regardless of this truculent approach, the French telecoms regulator, Arcep, said that the deadline for applications would remain set at 29^th October 2009, with the licence being awarded around eight months afterwards.

Arcep said that it would judge the applications based upon nine criteria, but with prominence placed upon the bidder providing 3G coverage for 25 per cent of the population after two years and 80 per cent after eight. The winner will also be measured on its business plan and the ability to support a full network rollout, estimated to require a capex of €1 billion.

Iliad, the parent company of French ISP Free, has confirmed that it would be a candidate for the licence, albeit that a previous bid for the licence by the company was rejected by Arcep in October 2007. Virgin Mobile France has previously suggested that it might be interested in the licence as a joint venture with Numericable, and Egypt's Orascom Telecom recently said it would consider joining a consortium to bid for the licence. Most observers believe that Iliad is the only company able to meet Arcep's requirements for a fourth 3G licence in France.

For more on this story:
Telegeography and Cellular News

Virgin Mobile: Where will Branson spend his US$250m?

Paul Rasmussen — Wed, 29 Jul 2009 12:36:42 -0400

Having succeeded in snatching a profit of US$250 million from the sale of Virgin Mobile USA to Sprint Nextel, speculation has arisen as to where high-profile billionaire Sir Richard Branson might look to invest this considerable sum.

Branson could have made considerably more if he had sold when Virgin Mobile USA was floated two years ago, but industry watchers nonetheless are expecting the current proceeds to be invested in other mobile phone ventures, particularly in France, India and the Middle East.

As the French government prepares to open the auction for the country's fourth 3G licence, Virgin Mobile France and Numericable, which is owned by private-equity firms Carlyle Group and Cinven as well as investment vehicle Altice, are said to be studying a possible joint bid. According to insiders, the two firms could form a core holding company open to French and foreign partners that would then adopt an aggressive wholesale strategy targeting MVNOs.

Virgin Mobile has also stated it wants to increase its operations in India and was considering launching a Middle East mobile service.

For more on this story:
Time Online

Virgin Mobile taunts market with French 3G licence bid

Paul Rasmussen — Thu, 02 Jul 2009 10:17:44 -0400

Maybe we will, maybe we won't, is the message coming from Virgin Mobile France as to whether it will enter the bidding for the fourth French 3G mobile phone licence. The company said it was still in negotiations with various potential partners about making a bid, but admitted the suggested price for the licence of €240 million "seemed fair and relevant."

Interestingly, the company's secretary general, Philippe Maugest, seemed to drop a heavy hint that network sharing was key to any decision about making an offer for the 3G licence. "A new entrant must have the opportunity to deploy a new mobile network under economically viable terms," was how Maugest described the matter.

Given that the French regulator ARCEP is expected to award the licence in January 2010, the interested bidders must decide on any partnership within the next few months.

Virgin Mobile confirmed it is in talks with the cable operator Numericable--which already operates as an MVNO in France--and competes with Iliad in the provision of broadband, television, and fixed-line phone services. Iliad is the only firm to have officially lodged an interest in bidding for the 3G licence.

Numericable failed to clarify the situation by confirming it was considering several bidding options for the 3G licence, and that an alliance with Virgin Mobile was one possibility under review.

The existing 3G operators--Orange, SFR and Bouygues Telecom--who paid €619 million in 2001 and 2002 for their 3G frequencies, have made plain their objections to the much reduced price for this fourth licence, and are keen to delay or halt the arrival of a fourth player.

For more on this story:
Reuters and WSJ