EU court dismisses Bouygues’ 3G bid case

9 Oct 2008

A legal advisor to the European Union court has adjudged that the European courts were right to dismiss Bouygues Telecom’s complaint vis a vis the French government’s allocation of 3G mobile licences, Dow Jones reports. The court advisor’s expert opinion will now be considered by a panel of top judges when they sit to make their final ruling. The French telco argued that the state’s decision to cut the multi-billion-euro licence fees it charged to two rival operators was unfair and constituted an illegal state subsidy to business. France originally launched a tender for four UMTS concession in 2000, priced at EUR4.95 billion (USD4.3 billion) each. However, only two bids were received – from SFR and France Telecom (Orange) – and the regulator subsequently moved to allocate the two unassigned licences at a lower asking price of EUR619 million each (plus a share of the profit from their use), in light of what was seen as a less favourable economic climate for 3G. Bouygues was the sole bidder in the second auction, following which the regulator decided that the other two licensees should pay the same amount to maintain a level playing field. The EU commission cleared the way for Paris to cut the licence fees in 2004 and Bouygues launched an appeal to overturn the decision – a case that was subsequently dismissed by the Court of First Instance in Luxembourg, in 2007.

France, Bouygues Telecom, Orange France, SFR