The Conseil d'Etat approves the entire procedure.

Paris, 12 October 2010

The Conseil d'Etat - which is France's highest administrative court - had received several requests to rescind the award procedure for the fourth third-generation (3G) mobile telephony licence, based on claims that several of the procedure's acts were illegal:

- the Decree dated 29 July 2009 setting the fixed portion of the licensing fee due from the new operator at €240 million;
- the Order dated 29 July 2009 issued by the Minister responsible for electronic communications, based on a proposal from ARCEP, setting the terms of allocation for the fourth licence;
- the ARCEP Decision dated 17 December 2009 approving the application submitted by Free Mobile;
- the ARCEP Decision dated 12 January 2010 authorising Free Mobile to operate a third-generation network in mainland France.

In a Decision dated 12 October 2010, the Conseil d'Etat rejected all of these requests

The Conseil d'Etat ruled that the determination of the amount of the set portion of the licensing fee due from the fourth operator, of €240 million, was neither too low nor discriminatory compared to the sum of €619 million paid by the three existing mobile operators in 2001-2002, in particular due to the lesser quantity of spectrum allocated to the fourth operator and the fact that it is entering the market ten years later than its competitors.

On the matter of the awards procedure itself, the Conseil d'Etat has confirmed that it took place in accordance with the principles of transparency and objectivity, and that the terms of the spectrum licence issued to Free Mobile in no way discriminated against the three existing mobile operators.

The Conseil d'Etat also issued a reminder of the benefits to the general public inherent in opening the market up to a fourth operator, in helping to improve the state of competition in the French mobile telephony market. In particular, it underscored that the 2G roaming rights which will be extended to Free Mobile do not constitute an unjustified advantage, but rather a small corrective measure whose purpose is to enable, at the very least, a greater chance of fair competition between the operators. The Conseil d'Etat also emphasised the fact that the fourth mobile operator needed to deploy its network very quickly, in a market that is nearing a state of maturity and lacking in liquidity. It is worth mentioning that the question of possible 3G roaming rights being extended to the new operator did not enter into the complaints that were filed.

Furthermore, the Conseil d'Etat approved ARCEP's selection of Free Mobile based on the chosen criteria and motives, and dismissed all criticisms that the Authority in any way favoured Free Mobile's application.