The European Court of First Instance ruled that the French government acted legally when it changed the conditions of 3G licenses granted to SFR and Orange. Rival carrier Bouygues claimed that the French state illegally subsidized its competition when it changed the conditions of the licenses. The ruling saves SFR, jointly owned by Vivendi and Vodafone Group, and Orange from having to pay the French government about $5.45 (€4 billion) billion each. Orange and SFR each paid €4.95 billion for their 3G licenses in 2001, but after the bubble burst, the French government decided more competition in the 3G market would be necessary to encourage growth. So it sold Bouygues a license in 2002 for €619 million and revenue sharing. The government then changed its previous deals with SFR and Orange to match Bouygues'.
For more on the 3G license dispute:
- read this WSJ article (sub. req.)