France Looks at Timing for More Mobile Competition

PARIS (03/15/2000) - While its southern neighbor Spain hands out licenses for new multimedia mobile communications networks, France is still debating when to introduce new competitors to its three incumbent GSM (global system for mobile communication) operators.

Earlier this week Spain awarded licenses to four companies to operate third-generation UMTS (Universal Mobile Telecommunications System) networks, [see "Spain Awards Europe's First UMTS Licenses", March 13] but France has yet to set definite dates for the operation of the licensing process.

"The process of calling for applications could begin in the second quarter this year, and if applications are delivered by September, licenses could be offered at the start of next year," said Jean-Michel Hubert, president of the French Telecommunications Regulatory Authority today at a press conference.

He said that further consideration was required of what services would be delivered, how quickly they would be rolled out, and in response to what demand.

A limited number of licenses were likely to be offered, as was the case with the current generation of networks, using GSM, of which France has three.

Hubert acknowledged that one possibility for increasing the level of competition and consumer choice, without the need for further spectrum space for either second- or third-generation systems, would be to offer licenses to virtual mobile operators (VMOs), which would build direct relationships with customers, but build no network infrastructure of their own, renting air time from other operators.

However, the question of whether France would issue licenses to VMOs had not yet been resolved, and the needs of both network operators and customers needed to be weighed.

Introducing VMOs could reduce infrastructure owners to the status of carriers, said Hubert, but "Investors in network infrastructure do not expect to be reduced simply to pipes for the transport of data."

On the other hand, he said, VMOs could enrich the market, offering customers fresh choices and services, and, "If the customer expects choice and diversity, we should offer it."

An independent study of the role of VMOs in the market for UMTS services had been commissioned, Hubert said, and the regulatory authority was in the process of considering the matter. Any decision would apply equally to the market for GSM services today.

The French Telecommunications Regulatory Authority can be found on the Web at

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