Germany offers 3G relief

June 5, 2001
Web posted at: 1036 GMT

LONDON (CNN) -- Germany will allow cash-strapped mobile phone companies the opportunity to share the cost of rolling out high-speed wireless networks.

RegTP, the German telecoms regulator, said on Tuesday the six third-generation mobile phone licence holders could share radio base stations and the towers and antennae that sit on top of them.

The German auction to sell six high-speed mobile phone licences, giving the operators the opportunity to offer video and Internet services to handsets, raised 50.5 billion ($43 billion) for the government.

But wireless operators spent more than $100 billion, much of it in crippling debts, as they acquired the rights to offer faster services and establish a European cellular footprint.

Now, those same companies are expected to spend as much as 8 billion on building their networks, analysts have estimated.

The move will come as a relief to debt-laden companies such as British Telecom, Royal KPN of the Netherlands and Spain's Telefonica, and could save the industry up to $14 billion, the Financial Times reported earlier.

British Telecom (BT-A) has lost its chairman and is selling businesses and shares to reduce its debt. Royal KPN is reported to be considering a rights issue to curb its debt mountain.

BT, which took a £3 billion charge in its full-year results because of a delay in its German 3G network roll-out, has estimated it could save between 20 and 30 percent of cost if it could share some technology with its rivals.

MobilCom, Germany's No. 5 mobile phone operator, has put the cost saving at up to 40 percent.

However, established operators Vodafone and Deutsche Telekom have threatened legal action if changes are made to the terms under which six licences were auctioned last August.

Germany's move could increase tension among European governments and European Union officials who have differing views on how to help companies that invested heavily in third-generation mobile phone licenses.

Many believe that network sharing could cut competition and mean higher prices for consumers. RegTP argue sharing technology will not harm competition, the FT said.

Terms under which the licences were granted would not be altered and the regulator plans to keep an eye on the operators to make sure competition is not stifled.

Nokia, the biggest maker of mobile phone handsets, has developed technology (base stations) that would allow four operators to use one piece of equipment.

The regulator's decision is likely to help Germany's four smaller operators: Mobilcom, partly owned by France Telecom (PFTE); British Telecom's (BT-) Viag; E-Plus, mostly owned by KPN, and Group 3G, owned by Telefonica and Finland's Sonera.

		Want the full story? Search for free Company Info...
		Enter Company Name:-

France orders new round as cellular license sale founders
Jan. 31, 2001
Relief. German 3G mobile phone auction ends
Aug. 17, 2000

France awards 3G licences - May 31, 2001

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.