DUBLIN, Ireland—There is some confusion in the European mobile sector about the likely impact of the European Commission’s decision to authorize governments to change the parameters of third-generation (3G) licenses.
The debt burdens created by the billions of dollars spent by operators, such as Vodafone Group, have hung heavily over the industry during the last 12 months in particular, stifling investment opportunities and putting severe downward pressure on share prices. Operators will no doubt be anxious to open dialogue with their respective governments—many have already conducted strenuous lobbying—particularly where the same operator owns licenses in more than one country.
However, it has also been pointed out that governments have never actually been unable to renegotiate or change the terms of their 3G licenses. The main reason given for their reluctance to do so is the fear of falling foul of the European Union’s competition rules, but there has never been any formal confirmation that this would be the case.
One possible stumbling block is that the European Commission will be anxious for the same new conditions to be applied to every country. This suggests that pan-European operators would have to convince several different governments to adopt exactly the same policy to get the maximum value from any re-negotiation—no easy task when some countries have fiercely resisted previous calls to reduce their license fees.
