The U.K. government now plans to auction five third-generation mobile phone licenses early next year, explaining that more competition will drive down prices and spur innovative services.
Last year, the United Kingdom plans to auction four 3G licenses by mid-1999, but postponed its auction plans several times. It now has included an extra license reserved for a new entrant, which will have a larger license area than the other four licensees and the right to roam onto at least one second-generation network.
The majority of 3G licensees are expected to be existing mobile phone operators that will have the advantage of offering 3G customers access to their current generation systems for seamless service. Mandating roaming for a new entrant, says the Office of Telecommunications, will ensure the licensee’s ability to compete with existing players.
Third-generation technology will allow operators to offer high-speed data rates of 384 kilobits per second, paving the way for the introduction of sophisticated multimedia services such as Internet access and full-motion video.
The United Kingdom today has four mobile phone operators. Vodafone Group plc, Cellnet, Orange plc and One-2-One will be contenders for the new licenses. Third-generation networks will allow them to maintain their revenue-generating potential in light of falling tariffs. A feature-rich service offering will justify higher margins, say analysts.
The U.K. government plans to auction three licenses for 2 10 megahertz paired spectrum plus 5 megahertz unpaired spectrum, one license for 2 X 15 megahertz paired and one license for 2 X 15 megahertz spectrum plus 5 megahertz of unpaired spectrum which will be reserved for a new entrant.
Most other European countries plan to tender between three and four licenses. The European Parliament and the Council of the European Union in December adopted a decision on the introduction of the Universal Mobile Telecommunications Standard in Europe, requiring member states to take actions that will allow mobile phone operators to introduce UMTS services by Jan. 1, 2002, and establish an authorization system for UMTS no later than Jan. 1.
UMTS is the 3G standard chosen by the European Telecommunications Standards Institute that incorporates wideband Code Division Multiple Access technology for mobile systems.
The Finnish government already has granted four national 3G licenses, while Germany expects to award licenses in late 1999.
The Netherlands is proposing licensing procedures begin in August for an auction that likely will take place next year. Sweden and Switzerland expect to grant licenses early next year.
