MADRID, Spain-The Spanish government may be considering easing the terms of the country’s third-generation (3G) licenses, but it appears that even this move may not be enough to help one operator. Xfera has said it will not launch before 2004 at the earliest because of delays in technology development.
The company, which is controlled by ACS Sonera Telefonia Movil, a joint venture between building company ACS and Finland’s Sonera, and Vivendi Universal, has already announced delays to the introduction of its services since its initial launch date of August 2001 was shelved.
Company boss Angel Garcia Altozano is blaming a reduction in research budgets for delays in technology development, claiming that companies are reducing their expenditure on research and development as the industry downturn continues. The company admitted it has made incorrect deployment commitments based on promises from the equipment suppliers.
The Xfera delay follows news that although the Spanish government has already made concessions to its four 3G license holders, it is now said to be seriously considering a proposal that would allow these operators to share 3G networks.
While the terms of the 3G licenses call for each operator to deploy a network, government ministers claim it would now be appropriate to make these original terms more flexible to ease the financial pressure being experienced by the license holders.
The government, which sold the four 3G licenses considerably cheaper than any other major European country, has confirmed speculation that it plans to cut the existing investment guarantees required from each license holder from 7 billion euros (US$7.03 billion) to 1 billion euros (US$1 billion). While this move would be welcomed by the four operators, its aim would appear to be focused on helping the two smaller operators-local telephone operator Amena and Xfera-which complain that maintaining credit facilities with banks to cover the investment guarantees increases their costs of borrowing.
