ARCEP is preparing to launch an application procedure to assign the fourth 3G mobile license

Paris, 23th November 2006

Today, ARCEP presents the responses to its two public consultations launched on October 5^th regarding:

- the reuse for 3G of the 900 and 1800 MHz frequencies, currently used by 2G, and the authorisation available in the 2.1 GHZ band for a third-generation mobile network ("fourth 3G license")

- the renewal of Bouygues Telecom’s 2G authorisation

• Public consultation on UMTS 900 and the fourth 3G license

Review

This consultation, whose principle had been announced publicly by ARCEP early this past summer, was launched in order to prepare the reuse of the 900 and 1800 MHz frequencies for 3G.

These frequencies need to be reused in order to extend coverage of third-generation mobile networks beyond current deployments in the 2.1 GHz band. Orange France and SFR, as their authorisations permit, had requested in the spring of 2006 that this possibility be made available rapidly.

In order to do this, players had to be questioned about their interest in the fourth 3G license still available, in order to determine whether three or four operators would have to be considered in the refarming of the 900 and 1800 MHz bands reused for 3G.

Main results from the public consultation

The public consultation was closed on November 17^th. In all, 21 players, operators and industry players, responded to at least one of the questions. The main results are presented below.

- A new development: several players have expressed interest in the fourth 3G license

 

Several players clearly expressed an interest in the assignment of the fourth 3G license in 2007. The request was made to launch the authorisation procedure as soon as possible.

This development creates a new situation on the mobile communications market. Until now, no interest had been expressed in the fourth licence which remained available following the two previous application procedures, by which three of the four 3G licences were assigned to Orange France and SFR in 2001, then to Bouygues Telecom in 2002.

- Confirmation of a major concern: reusing the 900 and 1800 MHz bands for 3G

 

The contributions also confirmed the importance of quickly reusing for 3G the frequency bands currently used by 2G. Access to the 900 MHz frequencies is particularly important, for both existing operators and any new entrant, in order to extend 3G coverage. In this respect, the future availability of UMTS networks and terminals in the 900 MHz band was confirmed by industry representatives in the consultation.

Some contributions also emphasised that access to other lower frequency bands would also eventually become important for the coverage of all of France and inside buildings by very high-speed mobile communications services, and that, therefore the upcoming assignment of a "digital dividend", corresponding to the frequencies made available by the digitisation of terrestrial television broadcasting, is of critical importance.

We now need to act in accordance with this new situation

- An application procedure needs to be launched very soon

 

In December, ARCEP will adopt the decision by which it will propose an application procedure to assign the fourth 3G license to the Minister. This decision will define the details of the procedure, whereas the Finance Law defines separately the fees. Depending on the publication date of the application procedure, applications could be required in the spring, so that the authorisation might be assigned before the end of 2007. Therefore, players are asked to confirm their interest by submitting an application in this procedure.

ARCEP considers that the assignment of this fourth licence could intensify competition on the mobile communications market and stimulate the evolution of mobile communications services towards the third generation, to the benefit of consumers.

- The plan for reusing 900 and 1800 MHz frequencies for 3G needs to be drafted quickly

 

ARCEP is already initiating works in order to quickly establish the means by which the frequencies currently used by 2G can be used for 3G, in order to facilitate the rapid extension of 3G coverage across France by all mobile operators. This refarming will be based on the sharing between four operators, which will be implemented if the fourth licence is indeed assigned, otherwise it will be based on the sharing between three operators.

- The access and mobile call origination market analysis is postponed

 

Finally, ARCEP is postponing the commencement of its analysis of the "access and mobile call origination" market (Market 15), on which mobile virtual network operators (MVNO) obtain access. The analysis has to be deferred so that, based on the outcome of the application procedure, it can fully take into account the existence of three or four operators on the French mobile network. In the meantime, the wholesale and retail access and mobile call origination markets will continue to be monitored.

• Public consultation on the renewal of Bouygues Telecom’s 2G authorisation

On October 5^th, ARCEP had also launched a public consultation on the renewal of Bouygues Telecom’s 2G authorisation, which expires in December 2009. This public consultation was a formal step which is part of a procedure similar to the one conducted in 2003 for the renewal of Orange France and SFR’s 2G authorisations which expired in March 2006.

Other than Bouygues Telecom’s contribution, the only comment received to this formal consultation highlighted that the refarming of the 900 and 1800 MHz bands for the reuse for 3G would have to be taken into account in Bouygues Telecom’s new 2G authorisation. ARCEP reminds players that the current 2G authorisations of the three operators already contain the measures required for this reorganisation.