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Author: Julian Grivolas
On 7 July, French telecommunication regulator ARCEP awarded two licences for each of the 22 regions in the 3.5GHz band to 15 companies, for a total of €125m.
Previously, on 30 June 2006, France's highest administrative court, the Conseil d'Etat, confirmed Free Telecom's ownership of a nationwide 3.5GHz licence.
We have mixed feelings regarding ARCEP's decision. It seems that ARCEP has tried to please politicians with the allocation of six licences to regional authorities, which was something the government actively promoted. We also have difficulty in understanding ARCEP's industrial vision regarding WiMAX, and the expected impact on the French telecoms landscape, due to the fact that most licences were allocated to new entrants instead of established French or foreign telecoms players. Furthermore, the geographical segmentation of the spectrum brings added complexity, and none of the selected companies can provide nationwide coverage.
At the beginning of the WiMAX licence allocation process in 2005, 175 companies expressed an interest in obtaining licences in France, but only 35 submitted applications in early 2006. In the end, 11 companies were granted regional licences in continental France:
- 13 regional licences go to Maxtel, a joint venture between Altitude Telecom, a WLL player, and APRR, a motorways company
- 12 regional licences go to Bolloré Télécom, in association with Hub Telecom, the telecoms arm of Aéroports de Paris, and Antalis
- 11 regional licences go to HDRR, a consortium including TDF, the French national broadcaster, and LD Collectivités, a company focusing on delivering telecoms services to local authorities
- 2 regional licences go to Société Haut Débit (SHD), formed by mobile operator SFR and fixed operator Neuf Cegetel
- 1 regional licence has been allocated to regional authorities in six regions (Corse, Aquitaine, Poitou-Charentes, Bretagne, Bourgogne, Alsace).
The big losers are incumbent France Telecom, which only won non-continental licences in Guyana and Mayotte, and WiMAX heavyweight, Clearwire, which recently raised $900m in funding from Intel and Motorola to support its global WiMAX strategy. In Western Europe, Clearwire is already offering WiMAX services in Ireland, Belgium and Denmark.
However, the main indirect beneficiary of the licence allocation is Free Telecom. The French ISP remains the only owner of a nationwide WiMAX licence since the completion of its acquisition of Altitude Telecom's 3.5GHz licence in November 2005 for €57m. In fact, this licence was initially returned by Neuf Télécom. Neuf Cegetel contested Free Telecom's WiMAX licence in a suit brought at the Conseil d'Etat. However, two weeks ago the Conseil d'Etat confirmed that IFW, Free Telecom's WiMAX subsidiary, is the full owner of the 3.5GHz national licence and remains the only player in a position to offer nationwide WiMAX services.
However, Neuf Cegetel has not lost everything, as ARCEP granted two WiMAX licences to its SHD consortium, in the two wealthiest regions, "Ile de France" (Paris and its surroundings) and "Provence Alpes Côte d'Azur" (South-East of France, including Marseille and Nice).
Of course, WiMAX infrastructure vendors also have good reasons to be happy, as ARCEP has stated that over 3,500 WiMAX sites will be deployed by June 2008.
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