Germany to offer 3G relief
Report: Germany to allow wireless operators to share technology
June 5, 2001: 2:35 a.m. ET
LONDON (CNN) - German telecom regulators will announce plans on Tuesday to help cash-strapped mobile phone companies save up to $14 billion, a report said.
The move will come as a relief to debt-laden companies, such as British Telecom, Royal KPN of the Netherlands and Spain's Telefonica, which will be able to share the cost of rolling out high-speed mobile phone networks.
However, established operators Vodafone and Deutsche Telekom have threatened legal action if changes are made to the terms under which six licences were auctioned last August, the Financial Times reported.
The auction raised 50.5 billion for the German government but wireless operators took on crippling debts as they tried to establish a European cellular footprint.
British Telecom (BT-A) has lost its chairman and is selling businesses and shares to reduce its debt. Royal KPN is reported to be considering a rights issue to curb its debt mountain.
Germany's move could increase tension among European governments and European Union officials who have differing views on how to help companies that invested heavily in third-generation mobile phone licenses.
Many believe that network sharing could cut competition and mean higher prices for consumers.
RegTP, the German regulator, will argue sharing technology will not harm competition, the FT said.
Terms under which the licences were granted would not be altered and the regulator plans to keep an eye on the operators to make sure competition is not stifled.
Nokia, the biggest maker of mobile phone handsets, has developed technology (base stations) that would allow four operators to use one piece of equipment.
The regulator's decision is likely to help Germany's four smaller operators: Mobilcom, partly owned by France Telecom (PFTE); British Telecom's (BT-) Viag; E-Plus, mostly owned by KPN, and Group 3G, owned by Telefonica and Finland's Sonera. |
