Numericable, Virgin bow out of French 3G auction

23 Oct 2009

French cableco Numericable and mobile virtual network operator (MVNO) Virgin Mobile France have decided not to apply for France’s fourth and final 3G mobile licence, citing unfavourable regulations and uncertainty on the project’s costs. Reuters reports their decision to walk away from the process leaves French internet and broadband provider Iliad (Free) the sole declared applicant for the EUR240 million (USD358.4 million) licence. The deadline for bids is 29 October. Explaining their decision in a joint conference call, Numericable CEO Pierre Danon said that the pair had spent a lot of time exploring the opportunity provided and in talking to the three incumbent cellcos, but had decided that ‘Given the conditions on the licence, we think it will be very difficult for the holder of the fourth licence.’ Under the terms of the licence award, the winner will have to build a network to cover 25% of the French population before it can reach a roaming accord with other operators. Danon noted that uncertainty over the timeframe and costs related to hitting this target made it too risky to proceed. The newcomer will need some 1,000 antennas to reach that threshold, he said. It would have to install the antennas at new locations or on the sites of existing operators, effectively increasing the risk and costs associated with the project. ‘The business case for the project could entirely fall apart,’ Danon added, saying ‘The level of uncertainty is very high.’

France, Altice France (SFR), Omea Telecom (incl. Virgin Mobile)