German 3G ruling to increase corporate welfare clamour

We're hurting!

European wireless operators are likely to increase their clamour for corporate welfare, if a ruling by Germany's winged watchdog sets a precedent.

The Germany Regulatory Authority for Telecommunications and Posts (RegTP) has ruled that the nation's 3G license holders Deutsche Telecom and Vodafone will have to share their wireless networks with third parties. The giant telcos are already upset at having paid $11 billion for high speed 3G licenses across Europe.

RegTP has promised that the terms of the UMTS licenses in Germany are not up for renegotiation, however.

The sale of radio spectrum provided an unexpected bonus for the treasuries of the UK and Germany in particular. But the telcos have been petitioning that the 3G services will not be economically viable, and have been pressing the EU for a refund. Which in effect, is a publically-sponsored tax rebate, as EU 'revenue' is derived from contributions by the member nations.

And that's an argument that doesn't go very far with some observers, who point out that the telcos can easily recoup the costs of their 3G licenses simply by encouraging more or longer mobile voice calls.

Voice revenue will be fifteen times the value of 3G data revenue in four years, according to Jupiter MMXI, and speaking to The Register in March, AT&T researcher Andrew Odlyzko pointed out that in the UK, networks need only increase the average time the UK mobile phone user spends making calls to 12 minutes per day.

That's hardly a justification for corporate welfare, and with the phasing out of pre-pay phones, the trend to a higher ARPU (average revenue per user) is already heading in that direction.

Odlyzko is the author of the research paper Content is Not King, and you can read his views on Europe's 3G madness here. ®

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