Spanish 3G start-up Xfera will cut its investments and freeze the development of its network, as well as cut back its workforce in an attempt to cut costs following its unsuccessful quest for a strategic investor or business partner, according to local daily Cinco Dias. Talks with Hong Kong-based Hutchison Whampoa amounted to nothing, according to the paper citing unnamed sources, but there remains three potential interested parties and Xfera will continue to look for an alliance. Orascom Telecom of Egypt has been named as a possible investor. Earlier this month the deputy minister for telecommunications, Francisco Ros, told reporters that the government had reiterated to Xfera that it must meet its 30 June launch deadline or lose its license.
Xfera was awarded its UMTS licence in March 2000, and was initially scheduled to launch 3G services in August 2001. It was forced to push back deadlines several times, however, due to technical and financial constraints, most notably postponement of its combined 2G/3G service because the regulator would not grant it GSM spectrum, claiming that it was too scarce. Scandinavian telco TeliaSonera and Spanish construction company Actividades de Construcción y Servicios (ACS) hold 34.18% of Xfera jointly, while ACS has a separate 17.95% stake and TeliaSonera an extra 2.23%.