HELSINKI, Finland—Tele2, the Stockholm-based Swedish mobile communications group, has emerged as a strong contender to secure one of Ireland’s four third-generation (3G) mobile licenses. The deadline for final submission of applications to the Irish regulator is 27 March.
Ireland plans to announce the winners of the four 20-year licenses in June, with services expected to be rolled out at the start of 2004.
Existing 2G operators in Ireland have expressed concern about the cost of the licenses. The A license will cost US$50.7 million, and the B licenses US$114.3 million.
The Irish regulator is reported to be anxious to inject a “European” entrant into the 3G licensing round, hoping to add an international dynamic to a lackluster marketplace dominated by U.K. operators. British Telecommunications’ Digifone and Vodafone Group’s Eircell currently offer mobile services in Ireland, in addition to Meteor, majority owned by U.S.-based Western Wireless, which began services just last year.
Tele2 is regarded by the regulator as having a suitable pedigree. The Swedish telecom is bidding as a pan-European operator, which holds 3G licenses in Sweden, Norway and Finland, as well as an aggressive mobile virtual network operator (MVNO) strategy.
“Like other operators, we will bid for an Irish 3G license providing that it is not organized as a beauty contest,” said Peter Scrope, the chairman of Tele2 (UK) Limited, which is leading the bid.
The Swedish telecom hopes to take advantage of Ireland’s favorable view of MVNOs and partner with one of the other bidders. “This would then allow Tele2 to offer mobile services as an MVNO, using a 3G operator’s network as its host,” said Scrope.
“We could well end up partnering with a 3G bidder,” Scrope said. “We will probably be able to add significant value to such a bid.”
Many international operators, including Tele2, believe that Ireland has benefited from offering its 3G licenses later than most European countries, putting the Irish regulator in a position to learn from the experiences of others. The regulator intends to include provisions for MVNOs in the license agreements, the first country in Europe to do so.
The Irish 3G guidelines also include provision for second-generation (2G) spectrum for greenfield 3G operators. This issue has caused considerable problems in other countries where 3G license holders, such as Xfera in Spain, have been forced to put their business plans on ice because of the delays in 3G rollouts.
With regard to MVNOs, the regulator has stipulated that the winner of license A should be given extra capacity to allow for an MVNO operator. The conditions for the three B licenses do not directly mention MVNOs, but seek to ensure promotion of competition.
For Tele2, an MVNO agreement in Ireland makes a great deal of sense as the company already holds a fixed network license in the country. However, no actual services have been yet launched. “We would want to launch fixed and mobile services at the same time,” said Scrope.
Tele2’s strategy is to become an MVNO wherever in Europe it holds a fixed license. This would allow the company to offer bundled services and use its existing infrastructure.
