Operators drag heels in UMTS race

19 May 2003

Carston Schloter, CEO of Swisscom Mobile [NYSE:SCM], has said in a recent interview that he believes only two 3G operators will remain in the Swiss mobile market on a long-term basis. In the delayed licence auction of December 2000, four 3G licences were awarded to Swisscom, Orange [PSE:ORA], TDC Sunrise [NYSE:TLD] and Telefónica [NYSE:TEF]; but Telefónica returned it’s licence shortly after. The Swiss regulator, ComCom, ambitiously stipulated that the licensees would have to achieve coverage of 20% of the population by the end of 2002, but none have launched commercial 3G to date. Swisscom Mobile and TDC Switzerland, the main players in the 3G race, have both cited technological difficulties and delays in equipment supply as reasons for the hold up of a commercial launch, but all three operators are unwilling to spend money on 3G until they see a marked increase in customer demand. ComCom has agreed to lift the deadline date for the launch of services and opted to oversee network construction on a rolling basis, although it has ruled that 3G services must cover 50% of the Swiss population by the end of 2004.