Government begins process to remove Xfera’s 3G licence, reports say

3 Apr 2006

Spain’s Industry Ministry has started legal moves to remove the 3G licence of start-up operator Xfera because it does not believe that the company will be able to comply with its deadline set to start operations by the summer, La Gaceta de los Negocios reports, citing government sources. Last week Xfera said it would lower its investments and freeze the development of its network, as well as reduce its workforce in an attempt to cut costs following its unsuccessful quest for a strategic partner. Talks with Hong Kong-based Hutchison Whampoa amounted to nothing, but Xfera says it will continue to look for an alliance with three potential interested parties. Orascom Telecom of Egypt has been named as a possible investor. The deputy minister for telecommunications, Francisco Ros, has said that the government had reiterated to Xfera that it must meet its 30 June launch deadline or lose its licence.

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%.

Spain, Xfera Moviles (Yoigo)