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To: Puck who wrote (10966)	4/23/2001 9:22:38 PM
From: JohnG	Read Replies (2) \| Respond to of 34857

Europe found to be full of clowns. What a ZOO. Why blow a whole 35 MHz for two lousy licenses any way when 5 or 10 will do? No GPRS in Spain (no spectrum). This is too funny. As Elvis Costello wrote; "I used to be disgusted, but now I try to be amused..." "The government plans to use the 35 megahertz to create two new licenses, even though existing operators say they won't be able to offer high-speed GPRS services (the stepping stone to third-generation mobile services) unless they receive the additional spectrum they were guaranteed three years ago." April 23, 2001 Four Spanish Mobile-Phone Operators File Legal Challenge to Proposed Spectrum Tax By Keith Johnson Staff Reporter of The Wall Street Journal MADRID -- Spanish mobile-phone operators have filed legal challenges to a pair of government measures designed to overhaul the sector. What was once Spain's hottest new industry has slammed on the brakes, adding more clouds to an already pessimistic outlook for mobile phones across Europe. The four mobile operators have filed legal challenges against the government's proposed 960 million euros ($866.7 million) "spectrum tax," under which established operators would have to pay as much as 250 million euros this year to use the radio spectrum The tax, included in this year's budget, was the government's response to criticism over the paltry revenue it received last year when it awarded third-generation licenses through a beauty contest format. But after the rich British and German license auctions, which served as the yardstick for the Spanish government's tax, the sector in Europe has collapsed as operators struggle with debt, and many governments are seeking ways to help finance the development of the fancy third-generation mobile services. Spain's No. 1 operator Telefonica Moviles SA, No. 2 operator Airtel Movil SA, which is owned by Vodafone Group PLC, and No. 3 Amena Movil SA have filed motions appealing against the tax with the Tax Ministry's watchdog agency for tax disputes, which has to decide within a year. New entrant Xfera, which has a third-generation license, has appealed directly to the Science and Technology Ministry, asking for an 85% reduction in the spectrum tax. The operators argue that the tax -- which is 32 times higher than last year's -- will hurt balance sheets, delay rollout of new services, and discourage new investment by breeding regulatory uncertainty, as the tax must be revised annually without any set criteria "The engine of growth in mobile phones has been shut down" because of the legal uncertainty and financial burdens imposed by the new measures, said Manuel Bueno, spokesman for Amena. He cited trimmed-down marketing budgets and mobile-phone penetration stuck since last December at 61%, just below the European average. A spokesman for the Science Ministry, which handles mobile-phone licensing, stressed that the complaints were a sign that the Spanish system was flexible, unlike its German or British counterparts. "They're protesting here because it can be changed," he said, in reference to the annual budget debates that set the amount of the radio spectrum tax. "We always have the opportunity to adjust the value of the spectrum to its true market value -- the licenses in Germany were expensive, and the money's already been spent," he added. Spanish press reports have speculated that Science Minister Anna Birules will push for a lower spectrum fee in next year's budget, although spokesmen wouldn't confirm those reports. The government's decision to spur competition by awarding two new second-generation licenses this spring also has drawn the ire of existing operators. Given Spain's below-average per-capita gross domestic product and scattered population, they argue, the market cannot sustain six operators profitably. Germany, for example, with twice the population and higher incomes, is questioning the viability of six third-generation operators. But the bone of contention is how the Spanish government plans to award spectrum to the two new entrants. Upon receipt of the new 1800 gigahertz licenses in 1998, the three global system for mobile communications operators -- Amena Movil, Airtel Movil and Telefonica Moviles -- each paid 13 million euros to make available an additional 11.6 megahertz of spectrum, guaranteed to be available to them next year. The government plans to use the 35 megahertz to create two new licenses, even though existing operators say they won't be able to offer high-speed GPRS services (the stepping stone to third-generation mobile services) unless they receive the additional spectrum they were guaranteed three years ago. Amena filed a motion with the High Court last month seeking to recover its additional spectrum. Telefonica and Airtel have said they also are studying legal measures to recoup the spectrum, key to both advanced services and to avoiding network congestion in high-penetration urban areas. Write to Keith Johnson at keith.johnson@wsj.com