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

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

Related stories:
Virgin Mobile taunts market with French 3G licence bid
Iliad's campaign for French 3G licence heats up
New French 3G licence designed to trigger competition
French regulator to push for 3G network sharing
French raise stakes for fourth licence auction

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