The first round of French LTE spectrum auctions has prompted Fitch Ratings to forecast that successful bidders will seek network sharing agreements with rival operators.
Chief among these is Iliad, France's fourth largest mobile operator, which seems very likely to continue with its strategy of little capital expenditure spending with regard to deploying LTE services. Fitch believes this approach could prove to be a valuable source of revenue to companies such as France Telecom Orange and the country's largest cellular tower business, TDF Group. Both of these firms already support Iliad's roaming service.
With the French LTE auctions already attracting bids above expectations--the 2.6GHz spectrum was sold for nearly a third above the reserve price--operators will come under increasing financial pressure as the capital expenditure demands for LTE deployment become apparent, according to Fitch.
Earlier this month all four French operators were granted licences for LTE spectrum in the 2.6GHz band following bids totalling €936 million, setting a new high-water benchmark in Europe in terms of the bid price per MHz per resident. All four operators are expected to make bids in the next LTE spectrum auction set to start in December for the more valuable 800MHz spectrum. The government has set a minimum level of €1.8 billion for this next round, having previously set a target price of €2.5 billion for the entire auction, a number that now looks likely to be easily exceeded.
- see this Reuters article
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