Sweden unlikely to relax 3G terms

The Swedish government is not inclined to relax its tough 3G rollout conditions despite an appeal from Orange
Written by Graeme Wearden, Contributor

Orange's request to the Swedish government for a relaxation in its 3G obligations is likely to be rejected, according to reports.

A senior executive at Sweden's Post and Telecom Agency said last week that little evidence that third-generation mobile operators should be given an extra three years to achieve the rollout targets they signed up for when they were awarded 3G licences back in late 2000.

"What we have seen so far is that there's nothing that points to operators not being able to fulfil the promises they made to us,'' said Ann-Marie Engvall, director of the telecom department at Sweden's Post and Telecom Agency. Engvall was speaking to Swedish newspaper Dagens Nyheter.

Orange applied for a change in the terms of its Swedish 3G licence in early August. Citing the late entry of Telia into the Swedish 3G market, it claimed that the arrival of a fifth player into the market meant it was no longer appropriate for the original four 3G licence-holders to be expected to rollout services as earlier agreed, and asked for a three year extension.

Unlike in the UK, where a keenly fought auction contest yielded over £22bn for a surprised and delighted government, the Swedish government opted for a beauty contest approach to the distribution of its four 3G licences.

In return for winning a 3G licence for just £7,000 plus 0.15 percent of annual turnover, the winning operators -- Orange, Tele2, Europolitan (backed by Vodafone) and Hi3G -- agreed to make 3G services available to 99.98 percent of Sweden's population by the end of 2003.

Telia, the incumbent Swedish mobile operator, was surprisingly not awarded a licence via the beauty contest. However, it has now managed to enter the market through a deal with Tele2 -- and Orange claimed that now there are five 3G operators in the market licence conditions must be relaxed, as there is more competition.

A decision is expected from Sweden's Post and Telecom Agency in October. There is speculation that, should it not get its way, Orange might simply withdraw from the Swedish 3G market.

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