Swiss scandal puts 3G licence in doubt

Switzerland's telecoms regulator is threatening to take away TeleDanmark's 3G licence if it finds any truth in newspaper allegations of an illicit pre-auction agreement between the Danish telco and Deutsche Telekom.

Ofcom has contacted diAx, the subsidiary of TeleDanmark that ran the company's UMTS bid, demanding an explanation. A spokesman for Ofcom said: "We have written to diAx to ask what is going on. The problem is that Deutsche Telekom retracted from the auction and there was speculation that it retracted because it was in talks with TeleDanmark and was going to wait until the auction was over and then come into the market at a lower price." The spokesman warned that Ofcom will exercise its power to withdraw the UMTS licence if the allegations of an illicit agreement are true. He said: "The rules of the auction do not allow operators to participate in agreements before or during the auction. We have the power to take that licence away if we come to the conclusion that they took part, or are taking part, in a deal - and we will use that power." Deutsche Telekom and TeleDanmark strenuously denied the allegations which arose in Swiss newspaper SonntagsZeitung. Gitte Forsberg, senior vice-president, general counsel, at TeleDanmark said: "Under normal circumstances we do not comment on speculation. But in this case we have been contacted by the Swiss authorities - and we are going to tell them, there is not and has not been talks between Deutsche Telekom and TeleDanmark concerning ownership of TeleDanmark licences in Switzerland or our companies in Switzerland." However, Henry Harrison, analyst at Schema, said: "Although I cannot comment on specific cases, it is no secret that everyone is searching for ways to pay less and it is no secret that the longer the auctions go on the more sophisticated [companies] get."