Switzerland last week awarded national licenses to two of five rival consortia-diAx mobile and Orange Communications SA-to operate wireless networks in competition with the country’s single operator, Swisscom.
The winning consortia beat out Unilimitel, which partnered Deutsche Telekom with France Telecom; Fortel SA, a venture of AirTouch Communications Inc., Mannesmann Eurokom GmbH of Germany, the Sandoz Family Foundation and Swiss investor Thomas Schmidheiney; and Sunrise, which grouped Tele Danmark and British Telecommunications plc with state-owned Swiss Federal Railways, retail chain Migros and Union Bank of Switzerland.
The Orange consortium, formed by Britain’s Orange plc, Germany’s Viag AG and Swissphone Engineering and other Swiss partners, won a license to operate an 1800 MHz Global System for Mobile communications network.
The more expansive license was awarded to diAx mobile, which combines more than 50 Swiss electrical utilities, SBC Communications of the United States and Swiss Reinsurance. The diAx group was authorized to operate on both the 900 MHz and 1800 MHz frequency bands, as does state-owned Swisscom.
diAx mobile plans to provide wireless services within six months, said SBC, offering consumers one-stop shopping in conjunction with its sister landline company, diAx. The group’s business plan estimated 800 new people being added to the diAx employees already working in the region. SBC hold a 40-percent interest in the diAx mobile venture.
“This makes a great addition to SBC Communications’ operations in Switzerland and its growing presence in Europe,” said Cliff Eason, president of SBC International Operations.
The Orange consortium plans to invest more than $666.2 million in its venture and launch its network in early 1999, providing up to 1,250 jobs in the region, Orange said. Orange plc and Viag AG each hold 35-percent interests in the group. The other 30 percent is held by other Swiss partners.
The losing consortia have 30 days from the time they receive notification in early May to appeal the decision. Unilimitel said it would still like to enter the Swiss market, but that it has not yet decided its next move.
The 10-year licenses were awarded by the Federal Communications Office following a two-month review to determine which of the groups had the best business plan, capacity, technical conception and innovation, the agency said in a February statement announcing the six bidding groups.
Switzerland has been viewed as unique while liberalizing its telecom market this year because its licensing process was based on criteria of merit rather than selecting the high bidder. The Orange consortium, for example, was not seen as a high contender because it lacked connections experience and a well-known Swiss partner.
A small sixth bidder called CheaperNet, a venture of a Zurich discount computer retailer, dropped out of the bidding process after meeting the Feb. 13 deadline to enter a bid for one the two licenses.
