German UMTS license terms to remain unchanged - regulator
By Total Telecom staff
03 April 2002
The German regulator stays firm on UMTS license conditions as others call for changes to smooth market consolidation.
The head of Germany's regulatory body has stressed that there are no plans to change the terms of the country's UMTS licenses, despite calls to amend the conditions to allow smaller players to keep their licenses if they merge.
In an interview with German financial daily Handelsblatt, regulator Matthias Kurth also rejected suggestions that the regulations prevent market consolidation, saying that the regulatory authority would not allow the mobile operators to "pass the buck."
"We cannot alter the conditions of a closed awards process after legally binding license awards have been made," Kurth is quoted as saying. Kurth argued that if companies bid more for a license than it is now currently worth, the goodwill must be written down - as is already happening with over-priced subsidiaries bought during the boom.
The head of Vodafone's German operations, Juergen von Kuczkowski, is said to have already threatened legal action should such a step be taken, Kurth told Handelsblatt.
This latest scuffle with the regulator was instigated by the CEO of France Telecom, Michel Bon, who argued that merged holders of German UMTS licenses should be able to keep both licenses, rather than having to return one as is currently the case.
Bon is said to have told Handelsblatt that the aim of France Telecom, which has a 28.5% stake in German mobile reseller Mobilcom, would be to merge with one of the smaller UMTS license holders, such as Quam, E-Plus or Viag Interkom. The new entity would then hold two licenses and sell some of the spectrum to a larger player - in exchange for much-needed cash.
That Kurth is not willing to smooth this path need not surprise the market. He has previously indicated that the office of the regulator does not wish to see spectrum become the object of market speculation.
Kurth indicated to Handelsblatt that if two companies were to merge the returned license would not automatically be awarded to another company. The first step would be to discuss the matter with all those in the market.
It is possible that a "spare" license could be auctioned among the other five license holders, thus ensuring that no player could enter the UMTS market at costs far lower than those paid by the other UMTS license holders. These all paid around E8.4 billion for their UMTS spectrum allocation. |
