European Commission opposes calls for change to 3G licences

The European Commission has rebuffed calls from cash-strapped mobile phone operators to change the conditions of 3G...

The European Commission has rebuffed calls from cash-strapped mobile phone operators to change the conditions of 3G (third-generation) licences to allow market consolidation.

Following a sharp drop in telecom stocks compounded by a global economic downturn in the past two years, mobile operators have been lobbying national governments to change the rules and let them either sell spectrum to another party or retain it if they merge with a rival.

"In principle, 3G licensing conditions should not be changed in order to ensure a predictable environment and legal certainty favourable to long-term investments," the commission concluded this week, following consultations with governments and operators in the member states over the past year.

The document stated that changes in licence conditions could be envisaged only if circumstances have changed "unpredictably".

Last year the commission made one concession to mobile operators - it allowed them to work together to build networks. In Britain, T-Mobile and mm02 have taken advantage of this networking sharing opportunity.

Few further concessions are likely from the commission or national governments, which ultimately have the power to renegotiate licences.

Horst Ehrnsperger, director of telecommunications policy at the German Ministry of Economics and Technology, said last month, the government was "aware of the concerns of a few mobile operators" but has "absolutely no plans to change the licence conditions".

France has slightly eased the terms of its 3G licences by reducing a government-set price and extending the length of the licences.

Mobile companies in Europe spent more than £60bn for 3G licences in 2000 and 2001 and are expected to pay another £30bn or more to build the next-generation packet-switched networks. The technology, offering transmission speeds nearly 40 times faster than existing standards, promises high-speed Internet surfing, video, and e-mail services.

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