Report: French operators lobby for LTE spectrum caps to combat Orange

The prospect of France Telecom Orange dominating the bidding for LTE spectrum has provoked calls from the smaller French operators for limits on the amount a single operator can buy, according to a Reuters report.

Rivals to FT Orange are thought to have approached the French government and the telecoms regulator, Arcep, in an attempt to impose a cap or a requirement to share spectrum that is won by FT Orange in the LTE auction that is scheduled to start this summer. Arcep announced that it would start the LTE auction tender process next month, and award the licences by the end of 2011.

Reuters reported that one unnamed industry insider said: "Our nightmare scenario would be that France Telecom puts big money on the table and buys half of the frequencies."

The government and Arcep have been struggling to find a mutually acceptable position that brings the government the maximum amount of revenue while satisfying Arcep's ambitions to encourage a competitive environment and motivate the smaller operators to invest in their networks.

The government is looking for the LTE auctions to raise at least €2 billion, and is said to be resisting Arcep's drive for even-handednessm according to the Reuters report. The auction schedule has already slipped several months as the two sides argue the merits of each other's plan. If the government is successful in overruling Arcep, then most at risk are the country's third-biggest mobile operator, Bouygues Telecom, and Iliad which plans to launch its 3G service next January.

Ofcom, the UK telecoms regulator, has decided that the forthcoming LTE spectrum auction will come with strict conditions for how much spectrum operators can purchase. Spanish regulators have also imposed spectrum caps.

The French administration has, according to a source, accepted that caps are needed. But the dispute with Arcep hinges around what amount of 800MHz spectrum FT Orange could acquire. Rival operators worry that the government will have pressured the regulator into allowing FT Orange to purchase two of the four bands in the 800MHz spectrum.

For more:
- see this Reuters article
- see this separate Reuters article
- see this Dow Jones Newswires article (sub. req.)

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