Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: 49thMIMOMander who wrote (11805)	5/22/2001 9:49:45 AM
From: JohnG	Read Replies (1) \| Respond to of 34857

Euros ask, "How did this all happen to good socialists like us?" Face to Face with Jean-Michel Hubert - French regulator speaks out on state's role in 3G Joanne Taaffe 21 May 2001 The financial and technical setbacks associated with the rollout of third-generation (3G) mobile services is giving Europe's regulators some troubling questions to ponder. In the latest development, BT last week announced that due to software bugs in 3G handsets, its launch in the Isle of Man would suffer delays of at least three months. In April, NTT DoCoMo announced that its commercial launch of 3G services - the first ever - would be delayed by four months because of problems with handset manufacturing. "Across Europe, we are all asking the same questions. When will infrastructure be available - terminals, applications and services? Operators and suppliers need to find an answer to the new financial equation and this solution will need to find the confidence of the financial markets," says Jean-Michel Hubert, head of France's regulatory body, ART. "It is affecting the rest of the world ... There are some very serious events occurring." Hubert is well-placed to reflect on the problems besetting 3G. A dearth of license applicants meant that only two of the four available French UMTS licenses were awarded to bidders in January. Hubert has been an unwavering supporter of awarding licenses via beauty contests, seeing it as a means to ensure the financial success of operators, enabling them to provision reasonably priced services to consumers in an uncertain market. "When a new market opens, you don't know what shape it is going to take, and it is serious to weaken the investment capabilities of the companies that are going to take risks and make customers pay," he says. Yet the regulator's advice went unheeded by the French government, which, keen to follow the example of the United Kingdom and Germany and cash in on license revenues, put a Ffr32.5 billion (US$4.6 billion) price tag on each of the four available 3G licenses. Potential candidates, including global system for mobile (GSM) operator Bouygues Telecom, of Paris, balked at the price and refused to compete. Now, the regulator will have to oversee a second round of license allocations once the French government has set the terms. In this context, UMTS rollout in France is unlikely to take place before the European Commission's deadline of January 2002. But as Hubert points out, a combination of financial and technical obstacles to operators means France is far from alone in facing delays. In Spain, for example, the government has relaxed its demands for initial 3G network rollout in August 2001 and given operators until June next year, in response to the lack of handsets and equipment. Operators have not been helped by the requirement to bid for licenses and and build networks at the same time across Europe. "One can say that the simultaneousness that has been imposed, in principle, on the opening of 3G markets across Europe is extremely constraining for operators, equipment manufacturers and the market," says Hubert. "Europe's wish was to build a large European market. I understand that at the time the belief was that the 3G market should open across Europe at the same time." He argues that it is unwise tohem a market in too tightly by setting deadlines. "You can't impose such a decision on the market. The market comes when it's ready, which is what it is in the process of reminding us," he says. Regulators are now left to examine ways in which they can lighten the load on would-be 3G operators, such as infrastructure sharing (see story p.1), a question on which ART has yet to make its position clear. "It's important to clarify the subject (of infrastructure sharing) rapidly," admits Hubert. "If it is an element that could lighten the burden of an operator and help the market, then we need to be open to this development." Although Hubert accepts that "it's easier to re-write history in hindsight," operators will now clearly need more time than originally thought to build networks and services. "The time needed (to develop a market) was forgotten in the irrational exuberance that marked the end of 1999 and early 2000," says Hubert. "Today, we have this brutal realization that you don't go from one technology to another in a matter of a few months." What's more, 3G will be a much tougher commercial proposition than 2G, he says. "When 2G began, it was a simple service - voice - and the new (feature) was mobility. The service was known and mobility was simple to understand. When prices became attractive, the market expanded. In a way, 3G is the reverse. It is taking mobility and developing other services (such as) data and images. The problem is ... that the (end) customer is only becoming aware of data, and images are even less well-known."