Feeds

French say encore to 3G auction

Gallic wariness knackers Jospin's pension windfall

  • alert
  • submit to reddit

The essential guide to IT transformation

The auction for 3G licences in France will have to be re-run after its one-fee plan for the four licences available collapsed. All but two of the bidders withdrew, turning the sale into a farce and heavily embarrassing the French government.

The French decided against the British and German 3G approach of a straight auction, preferring instead a flat-fee of £3.2 billion for each licence. Companies would have to enter a "beauty contest" to persuade the regulators why they should have it. Even though the price was less than we and the Germans ended up paying, recent reservations about 3G technology and the huge cost of investment needed for it has made mobile companies very wary.

Head of the government Lionel Jospin is particularly annoyed because he planned to use the £12.8 billion to prop up the country's shaky pension system.

Now the auction will have to be re-run and either the auction system changed or the licence price reduced. The only two bids put forward - from Orange (France Telecom) and SFR (Vodafone) - will still be assessed, said the finance minister Laurent Fabius, although it seems unlikely that they will be willing to pay a higher price if the cost is reduced so others take the remaining two licences.

The withdrawal from the auction started with Deutsche Telekom on 21 November. Then, days before the auction was to start (24 January), Suez Lyonnaise des Eaux and Telefónica decided it wasn't for them. Then, as soon as it started, Bouygues Telecom said the price was to high and wandered off as well.

There's irony in bundles here. By watching and waiting to see what happened elsewhere, the French government has actually slashed the income it could have expected. However, since companies in the French market will not have to pay the ludicrous prices of elsewhere in Europe, there is a very real possibility it may produce a far more effective and popular 3G network. We shall see.

The cost of the 15-year licences is to be paid in two parts: half this year and the other half over the next 13 years. ®

Boost IT visibility and business value

More from The Register

next story
Pay to play: The hidden cost of software defined everything
Enter credit card details if you want that system you bought to actually be useful
Shoot-em-up: Sony Online Entertainment hit by 'large scale DDoS attack'
Games disrupted as firm struggles to control network
HP busts out new ProLiant Gen9 servers
Think those are cool? Wait till you get a load of our racks
Silicon Valley jolted by magnitude 6.1 quake – its biggest in 25 years
Did the earth move for you at VMworld – oh, OK. It just did. A lot
VMware's high-wire balancing act: EVO might drag us ALL down
Get it right, EMC, or there'll be STORAGE CIVIL WAR. Mark my words
Forrester says it's time to give up on physical storage arrays
The physical/virtual storage tipping point may just have arrived
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.