Telefónica given one month on 3G spectrum

12 Jul 2005

Italian regulator Autorità per le Garanzie Comunicazioni (AGCOM) has given Telefónica Móviles’ local mobile unit Ipse2000 one month to secure fresh investment or sell its 3G radio frequencies. If it fails to meet the deadline AGCOM will withdraw the company’s ownership of the spectrum. The operator paid USD2 billion for its UMTS frequencies in October 2000 but has yet to launch services. ‘Ipse has a month to sell all the frequencies, none excluded, which it was assigned in the auction. Alternatively, the shareholders can sell the company to other UMTS operators,’ AGCOM said in a statement. Telefónica has yet to comment.

Ipse’s apparent demise has long been on the cards. The Italian government has had its eye on the company since mid-2003, when speculation emerged that it was not likely to fulfil its rollout obligations. Ipse trimmed its investment programme in 2002 when Telefónica shied away from committing any more money to the venture, which included plans to lay off 109 of its 122 workforce, sparking criticism from unions and the government alike. The state introduced new regulations in August 2003 enabling it to lease part of its spectrum and invest the extra income into its own launch, but at that date Ipse had still not rolled out a network. Telefónica subsequently tried to sell back a third of its frequency allocation to the state, complaining that the licence fees were ridiculously overpriced, but this fell on deaf ears and the operator remains in full control in its licence – for one more month, at least.

The other operators licensed in the 2000 auction – Telecom Italia Mobile, Hutchison 3G Italia, Wind and Vodafone Italy – have all launched commercial 3G services.

Italy, Ipse 2000