Britain’s Department of Trade and Industry cleared British Telecommunications plc to raise its stake
in Cellnet above 60 percent and said the company can bid in auctions for third-generation mobile
spectrum.
According to Cellnet’s Telecommunications Act License, which allows the company to operate a public
mobile telecommunications network, the company could have its license revoked if any party increases its stake in the
company above a 60-percent ceiling. The restriction was introduced in 1983 as a competition safeguard given BT’s
dominance in the fixed-line telecommunications market, said DTI.
“Over time, accounting separation has
become a more appropriate means of meeting competition safeguard objectives and the announcement clarifies that,
should BT agree to account separately for its Cellnet shareholding, the restriction may be removed from Cellnet’s
license,” said DTI.
BT owns 60 percent of Cellnet and Securicor plc owns the remaining 40 percent. Both
companies said they are not currently in discussions to transfer ownership of Securicor’s 40-percent interest to BT,
although Securicor has stated it would consider disposing of its interest in Cellnet.
The companies are discussing
Cellnet’s participation in the 3G auction process, said Securicor. BT, however, said it is considering its options
concerning 3G, including bidding as BT rather than through Cellnet.
DTI’s comments regarding Cellnet stem from
its decision allowing BT to bid for 3G radio spectrum. Given that BT would be permitted to operate a 3G license, said
DTI, the company also should be able to hold a second-generation mobile license, subject to certain competition
safeguards.
“It is DTI’s view that BT should be allowed to participate in the auction of third-generation mobile
spectrum on the condition that it agrees to place any third-generation activities into a separately accounted business, the
purpose of which will be to ensure that BT does not unfairly subsidize or cross-subsidize or show undue preference or
exercise undue discrimination in favor of its third-generation mobile business, should BT be successful in the
auction,” said DTI in a prepared statement.
Meanwhile, speculation persists that BT and AT&T Corp. may be
planning to marry their mobile phone operations. The London Sunday Times reported Sir Peter Bonfield, chief
executive of BT, said a mobile phone link-up is likely between BT’s interest in Cellnet and AT&T.
“We
haven’t got anything agreed yet but it doesn’t take a huge leap of faith to figure out that we could do some agreement
like that,” Bonfield told the Sunday Times. “Vodafone (plc) has said it can do unique things across the
Atlantic with AirTouch (Communications Inc.); we think we can do that as well.”
The companies already are
partners in a joint venture announced in July that calls for the companies to pool their international operations and form
a new company to provide telecom services to multinational corporate clients.
