Copyright 2002 VNU

Network News…06/19/2002

From LexisNexis

The European Commission (EC) has left the door ajar for operators to renegotiate their expensively-acquired 3G licenses, but doing it will be tolerated only in exceptional circumstances.

With some $106 billion (GBP 71bn) spent on acquiring the licenses, operators have been looking for signs that the license could be renegotiated.

However, Erkki Liikanen, Enterprise and Innovation commissioner, said he believed "3G has developed sufficient momentum to overcome the present difficulties".

In a statement, the EC acknowledged that "the financial environment constitutes a heavy burden for the communications sector overall, which affects 3G rollout plans, as operators focus on improving their financial standing".

The operators are worried that in order to recoup the cost of acquiring license they risk making 3G services too expensive.

But the EC believes that beyond encouraging economic recovery "the sector is best served by letting the market drive the process ahead".

The EC does not believe that 3G licensing conditions should be changed, but is prepared to be flexible. It said: "In order to ensure a predictable environment and legal certainty favorable to long-term investments, flexibility is recommended in case of unpredictable changes of circumstances requiring adaptations.

These should remain proportional and transparent.

"For that purpose, the Commission is ready to examine solutions for a harmonized approach with the member states - which are responsible for the license, as it did for conditions applying to network infrastructure sharing."

"The EC said authorities should help facilitate network rollout by harmonizing the applicable rules for the approving base stations and speeding up the procedures for the acquisition of sites.

Longer term, the EC added that a more flexible framework for handling rights to use radio spectrum needed to be discussed, including for wireless applications.

Liikanen said, "The roll-out of 3G is a continuous process which deserves continued attention by public authorities when accompanying the efforts of market players themselves.

"There are no simple answers to the challenges ahead."