The operators view 2005 as a more realistic start date
FOCUS Orange faces compensation claim from partners after Sweden exit
Dec 23 2002
STOCKHOLM (AFX) - Orange faces a possible multi-billion-kronor compensation demand from its former 3G partners in Sweden, who are sure to benefit in terms of market share from the France Telecom unit's decision to pull out of UMTS services in the country, analysts said.
According to Johan Klevby, analyst at investment bank Carnegie, Vodafone PLC affiliate Europolitan Vodafone AB and Hutchison Whampoa Ltd's Hi3G will now face 3 bln skr of extra costs.
Orange had agreed to share the infrastructure burden with the two partners by dividing Sweden into geographical zones, and was to build networks in Stockholm, Gothenburg, Malmoe and Karlskrona.
It could now face huge cash demands from the allies it has left dangling, analysts said.
Orange is looking to offload that cost, but it will not be easy to find a new operator to take up the slack.
"The market is sufficiently congested as it is. The appearance of a new actor like Norway's Telenor, for example, does not seem likely," Carnegie's Klevby said.
Orange's departure will, however, give Europolitan and Hi3G and Sweden's other two remaining 3G operators - Telia and Tele2 - a greater slice of the future UMTS pie.
"The impact on Orange's four competitors ... is of course positive," one telecoms analyst said.
There had been speculation that Orange would walk away from Sweden as a global cost-cutting programme launched by France Telecom deprived the unit of the means to build a 3G network.
While Orange's operation is the first victim among UMTS hopefuls in Sweden, the other players are also finding it hard to meet their infrastructure construction obligations.
Ulrica Messing, Minister for Infrastructure and Telecommunications, this week signalled her readiness to soften her line, saying she might "discuss" a revision of licence conditions.
Under current conditions, the operators have to open their UMTS networks by Dec 31, 2003 and serve 99.98 pct of the Swedish population, or face stiff penalties.
The operators view 2005 as a more realistic start date.
newsdesk@afxnews.com
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LOL!
Wait till 2005 and pray for efficient base station amplifiers? |
