"We are considering appealing the National Post and Telecom Agency (PTS) rejection but have not yet made a decision," a Vodafone spokesman said.
The Swedish regulator, PTS, rejected Vodafone's request on the grounds that the operator's reasons for delaying its third-generation (3G) roll-out in the country were insufficient to warrant changes in the terms of the mobile broadband licence.
Europolitan Vodafone, Vodafone's Swedish unit, cited problems obtaining building permits for new masts from municipalities and the military as the main reason for the delay.
"We understand that some of the operators have encountered problems acquiring building permits, but we don't believe these problems are big enough for us to change any of the conditions," said Hans Brandstrom, head of telecom policy at PTS.
One of the conditions of Sweden's 3G licences, which were awarded essentially for free, was for operators to provide 99.9% coverage of Sweden by the end of 2003. Europolitan Vodafone had asked PTS to extend that deadline to the end of 2005.
Vodafone is not the only operator in Sweden to seek permission for a three-year delay in the full 3G roll-out. In October, PTS rejected a request by the Swedish subsidiary of Orange, which is owned by France Telecom.
Last month Hi3G Access, the Swedish mobile phone unit of Hutchison Whampoa, also requested changes in the conditions of its 3G licence. PTS has yet to rule on the operator's request. "We can't say when we will make a decision," Brandstrom said.
Like Orange, Hi3G is a newcomer to the Swedish market. Neither operator operates a Global System for Mobile Communications (GSM) network in the country.
"We are looking at each request individually," Brandstrom said. "If we decide to give relief to one operator, of course, we will have to take up the matter with the other operators."
Of the four operators to have won 3G licences, only Tele2 appears to be on track to meet the end-of-2003 deadline. Tele2 is collaborating with state-owned telephone company Telia, which is the only telco in Sweden not to have secured a 3G licence.