Shares of French 3G operators have moved sharply higher on rumours that the government has postponed plans to issue a fourth 3G licence. Sources within the industry claim that the reluctance stems from the notion that a fourth 3G operator would struggle to survive financially.
Recognising that the government could generate over €600 million from the auction of the 3G licence--and given its widening budget deficit and mounting debt, industry analysts expect the government to 'manufacture' a process whereby it can persuade the existing 3G licence holders--Bouygues, France Telecom and Vivendi, to make an offer.
The French telecommunications regulator Arcep rejected an application for the licence made by Iliad subsidiary Free Mobile in October, as it did not meet the financial criteria. Iliad was reported as wanting a reduction or step payment of the €619 million licence fee.