French president gets involved with fourth 3G licence

The level of political lobbying surrounding the granting of the fourth and final 3G licence has been revealed following reports that the French president, Nicolas Sarkozy, has expressed his reservations.

The three existing 3G operators are believed to be at the centre of these manoeuvrings, claiming that the applicant for the fourth licence will only be asked to pay €240 million, a fraction of the €619 million they each paid in 2001.

However, the involvement of the president of France in this argument significantly increases the pressure on the telecoms regulator to review the condition of the 3G tender. According to inside sources, Sarkozy was said to be sceptical on the choice of the fourth 3G operator, suggesting that the "lowest price was not necessarily the best one."

The French ISP Illiad is expected to be the most likely successful bidder, but, following Sarkozy's remarks, the value of the company's shares fell by over two per cent in a rising market. Other bidders interested in the fourth licence are expected to include a joint proposal from Numericable and Virgin Mobile, but observers remain doubtful of this combined bid making progress.

Orange and SFR have already threatened to challenge the bid price for this fourth 3G licence before the European Union competition authorities, while Bouygues Telecom said it too was considering action.

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