New French 3G licence designed to trigger competition

Lack of competition in the French cell phone market has prompted the telecoms regulator ARCEP to recommend that a new 3G licence should be awarded in a public tender. However, ARCEP failed to specify if it would award all the available frequencies to one bidder or divide the available spectrum into several bundles, some of which could then be earmarked for new entrants.

Leaving the door open to further political lobbying, the French Finance Minister, Christine Lagarde, said she had received the recommendations and would be discussing the issue with other relevant ministers prior to submitting their observations to parliament at some future date.

Following public consultation conducted earlier this year by ARCEP, the idea that the available 3G spectrum could be bundled into packages open to existing operators was rejected unanimously. This essentially leaves the French broadband provider Iliad (which tendered a low offer last year) as the most likely bidder for a 3G licence. In the past ARCEP has rejected Iliad's applications for failing to stand up to financial scrutiny, although with this latest recommendation the regulator has failed to provide any details of the financial criteria required of interested parties.

"We are looking at procedures that give priority to all or part of the frequencies to a newcomer, following similar conditions that governed the previous tenders," said an ARCEP spokesman.

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