Finnish telecos dissolve 3G subsidiary

Finnish telecoms companies Sonera and Enitel have announced plans to close their jointly owned 3G communications subsidiary...

Finnish telecoms companies Sonera and Enitel have announced plans to close their jointly owned 3G communications subsidiary Broadband Mobile ASA.

In a related development, Sonera returned its 3G mobile telephone licence to the Norwegian government and confirmed that it intended to absorb a $16.1m (£11.3m) write-off.

Paolo Pescatore, an analyst with International Data, said: "This is the first time a company has returned its 3G licence, but I think this is a one-off case that is particular to Sonera, since the company finds itself with a lack of funds."

Sonera's decision to return the 3G licence was a result of its inability to secure a similar licence in Sweden, making its planned pan-Scandinavian network impossible. In a statement, the company said the fact that Broadband Mobile is to be declared bankrupt would not have an effect of Sonera's other 3G investments.

Sonera and Enitel each own half of Broadband Mobile and paid $22.2m for a 3G licence in October 2000. For its part, Enitel estimated it had invested 137 million kroner (£11.6m) in Broadband Mobile and had outstanding claims totalling 100 million kroner (£8.8m) related to the sale of Broadband Mobile's operations.

Pescatore added, "Sonera has been trying to sell itself for a while and its current refocus is a consequence of its inability to fund its various projects. This may affect the development of 3G in Norway since there are only two operators there, but mainly, this situation is Sonera-specific.

"Sonera is basically a small Scandinavian operator, but we can't get away from the fact that the networks are struggling to fund the new technologies.

"Basically, 3G has to work. The networks first must roll-out GPRS - or 2G - and make sure that they get those services right.

"Although it's been slow and there is only one GPRS handset on the market now, I think it's on track to make a significant appearance on the corporate market sometime next year."

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