Banks warned to be wary of exposure to 3G


Banks warned to be wary of exposure to 3G

The high cost of third generation mobile phone licences has raised fears that banks may no longer be willing to supply the loans needed to pay for 3G infrastructure.

The Financial Services Authority has written to 34 bank chief executives to remind them of the importance of carefully monitoring their exposure to telecoms company debt. It said they should be "particularly alert" to any downturn in the telecoms sector.

Earlier this year, mobile operators estimated that the costs of building a national 3G network ranged from £1bn to £3bn for an existing operator, to £5bn for a new market entrant. These costs come on top of the £22.5bn already bid for the licences.

The move came as shares in German telco Mobilcom fell 21%, after concerns were raised about its ability to refinance a 5bn Euros loan.

Related Topics: Mobile hardware, VIEW ALL TOPICS

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