HELSINKI, Finland—Finnish mobile operators, headed by the Swedish telecom company Telia Mobile, are exploring collaboration in constructing licensed third-generation (3G) networks. Telia is hoping to reach an accommodation with fellow license holders that would reduce the total cost of establishing 3G infrastructure by up to US$800 million.
With the first of three 3G networks scheduled to come into operation by year-end 2002, Telia believes cooperation is the only way forward for license holders that want to achieve a return on their investment “any time soon.”
“Operators have discussed the possibility of collaboration, and we are hopeful rather than confident that common ground can be found,” said Vesa Mars, Telia Mobile’s managing director in Finland.
Cooperation between operators could see base-station sharing or dividing the country into four geographical segments, with mobile users roaming in the networks of the other operators when travelling.
Telia estimates the capital cost attached to the construction of its 3G system will run to $720 million. “Apart from the cost factor, collaboration would also speed up delivery of 3G services,” said Mars.
In 1999, the Finland awarded four Universal Mobile Telecommunications System (UMTS) licenses in a so-called “beauty contest,” to Radiolinja, Sonera, Telia and Suomen 3G. According to the terms of the licenses, the networks should be operational early during the first half of 2002. However, several license holders are expected to lodge applications to postpone the launch.
The first 3G networks will initially serve to test the technology until 3G mobile handsets are available in stores. Most operators agree that a formal commercial launch will not be feasible until the end of next year, or in a worst-case scenario, the first quarter of 2003.
The infrastructure investment phase will comprise the construction of 5,000 base stations to cover all cities and rural areas. Most Finnish analysts forecast that the 3G UMTS networks will never be as extensive as the existing GSM networks. Sonera’s GSM network currently reaches 99 percent of the population. However, it could take around seven to 10 years before the 3G network reaches even 70 percent of Finns.
