Telefónica loses German court appeal to recover €8.4B 3G licence refund

A federal German court rejected Telefónica's appeal to reclaim the €8.4 billion it paid for 3G spectrum in Germany's 2000 licence auctions.

Telefónica was ordered to return its 3G licence after the local regulator ruled that the Quam joint venture--funded by Telefónica Moviles and Finland's Sonera--had failed to deploy a network within the timetable imposed by the licence conditions. The Spanish-based company, which has already failed to win its appeal in two lower courts, has now seen the Federal Administrative Court in Leipzig rule against it in a final decision.

Quam had initially offered 2G services starting in late 2001 using the GSM network built by E-Plus, but then announced in 2002 that it would not be proceeding with its own 3G network rollout due to the high Capex demands and poor market conditions.

Telefónica later re-entered Germany with the acquisition in late 2005 of the UK-based O2, group which already owned a 3G network. Telefónica had written off its investment of €4.9 billion in Quam in July 2002.

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

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