Telefónica Móviles in 3G talks with Rome

5 Jul 2004

Telefónica Móviles is reported to be involved in negotiations with the Italian government to postpone the deadline for rolling out 3G services in the country. The Spanish cellco, which owns 45.6% of 3G licensee Ipse2000, with parent Telefónica holding a further 4%, is looking to offload its foreign 3G licences in Italy, Germany and Switzerland, but is currently faced with the prospect of losing its Italian concession after failing to meet the rollout conditions outlined in its licence.

The Italian government has had its eye on Ipse2000 since mid-2003, when speculation emerged that it was not likely to fulfil its rollout obligations. Ipse, which trimmed its investment programme in 2002 when Telefónica shied away from committing any more money to the operator, announced contentious plans to lay off 109 of its 122 workforce, sparking intense criticism from unions and the government alike. The state asked the company to defer its plans until August 2003, when new regulations came into force enabling it to lease part of its spectrum and thus gain some income, but at that date Ipse had still not rolled out a network and become operational. Ipse subsequently tried to sell back a third of its frequency allocation to the state, complaining that the licence fees were ridiculously over-priced, but this fell on deaf ears and the operator remains in full control in its licence.

If Ipse2000 did manage to roll out a 3G network in Italy, it would face competition from existing players TIM, Wind, Vodafone Italy and H3G; the latter launched UMTS services in March 2003. At the end of March 2004 there were 56.8 million mobile subscribers in Italy, 453,000 of which were H3G customers.

Italy, Ipse 2000, Telefonica Moviles Group
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