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Sarkozy Adds to 3G Argument
(16 Sep 2009, BWCS Staff)The row over the fourth French 3G licence rumbles on. Yesterday, French President, Nicolas Sarkozy, added fuel to the argument by saying he wanted an operator that was "ready to invest" and not a "low-cost" company. The message, widely reported in France this morning, has been seen as a swipe at Iliad, currently the only bidder. Reaction in France has been swift, with shares in the mobile operator plummeting by as much as 6% on the Paris bourse. Iliad is also facing the ire of its rival operators who all paid much higher fees for their 3G franchises than those being demanded now.
Last month, France Telecom announced its intention to challenge the government's decision to sell a fourth mobile licence at a reduced rate. The one-time monopoly operator remains unhappy at the price set by Paris, despite the fact that the licence will now cost more than originally planned. The government announced in August 2009 that it plans to offer the fourth licence to supply 3G services across France for €240 million (US$338.7 million). Previously it had planned to put the franchise up for sale for €206 million.
Despite this hike in price, France Telecom remains determined to tackle the government on the issue and plans to take its case to the European Commission. The operator and its rivals, Bouygues Telecom and SFR, each paid €619 million for their 3G licences in 2001 and 2006. Clearly they now feel the newcomer would be handed a big cost advantage.
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