Sweden rejects request for 3G roll-out delay

Sweden's telecommunication regulator, National Post and Telecom Agency (PTS), has rejected a request by Orange to move the...

Sweden's telecommunication regulator, National Post and Telecom Agency (PTS), has rejected a request by Orange to move the deadline for completing its 3G mobile broadband network back three years to the end of 2006.

Orange cited problems with permits for masts, a lack of 3G equipment, a weak financial market and virtually no demand for mobile data service.

Vodafone also submitted a request to extend the deadline to 2005, citing similar difficulties in receiving permits for its masts and problems in the Swedish Defence Authority's handling of frequencies.

The country's 3G licence conditions call for operators to provide service to 8.86 million inhabitants, or 99.98% of the population, by the end of 2003 - a tall order for any operator, particularly those building networks in a country with a sparse population.

To ease the burden, the Swedish government has virtually given away the licenses. Operators must pay only an administration fee of around 100,000 Swedish kronor (£6,905) per licence - not a bad deal compared with the average of €8.5bn (£5.3bn) paid per licence in Germany.

"None of the operators had to make the kind of coverage promises they made," said Katarina Kämpe, director of communications at PTS. "If they had promised to provide 50% coverage by 2009, that would have been OK. But they didn't."

Unlike many European countries, Sweden granted its 3G licences to companies with the most attractive bids. As a result, operators were under pressure to make their bids as attractive as possible. Fast, ubiquitous coverage was their response.

Now Orange could face stiff fines if it does not meet the 2003 timetable, according to Kämpe. "We have a fine policy, based on the amount of coverage that is still missing by the deadline," she said. "If an operator has only 50% coverage, it can expect a pretty stiff fine."

Whether PTS will rule differently on the Vodafone request remains to be seen. Unlike Orange, which requested an extension to 2006 and lower coverage of 8.3 million people, Vodafone is asking for a two-year extension and no change in coverage.

"We will review the Vodafone request and make a decision before December," Kämpe said.

A decision in favour of Vodafone could set a precedent and encourage the other operators, including Orange, to seek similar conditions. That, in turn, could lead to a significant delay in 3G services coming to Sweden, which has been at the cutting edge of mobile technology for decades.

PTS appears to think otherwise. "We will review each case individually," Kämpe said. "According to the law, we can give conditions to one operator that we don't necessarily have to give to the others. Everything depends on what the operator is seeking and what problems it has had."

According to Kämpe, Sweden's other two 3G operators, HI3G Access, majority-owned by Hong Kong's Hutchison Whampoa and Tele2, are on track to meet their coverage deadlines.

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