EU throws out legal challenge to fourth 3G licence award

11 May 2011

Europe’s competition watchdog yesterday dismissed complaints from French cellcos Orange, SFR and Bouygues Telecom, vis a vis their legal challenge to the award of a 3G mobile licence to Iliad (Free), via its Free Mobile unit. The incumbent cellcos argued that Free effectively received illegal state aid in that it was charged EUR240 million (USD345 million) for its UMTS concession in 2009, while they each had to pay EUR619 million. However, the European Commission (EU) threw out the challenge on the basis that the procedure for awarding the fourth mobile licence to Free ‘did not involve any state aid under the EU rules’. In its ruling the EU said: ‘In the Commission’s view, the award was made by way of a transparent and open procedure in accordance with European Union regulations and resulted in a competitive outcome.’

The ruling coincides with latest data from the French telecoms regulator Arcep, which shows that the number of ‘active’ SIM cards in France (including overseas territories) climbed by 460,000 in 1Q11, taking the total to 65.5 million at 31 March 2011. In mainland France the total reached 61.25 million, up 6.2% from 57.69 million a year earlier. Arcep attributes the strong growth to rising popularity of data card services, which reached 5.6 million units at the end of the first quarter, and a strong showing from mobile virtual network operators (MVNOs). As at 31 March 2011, MVNOs in mainland France counted 5.29 million customers, a market share of 8.4%, thanks to 570,000 net additions in the first three months of the year. Meanwhile, France’s overseas regions and dependencies added 120,000 mobile customers in the year to 31 March 2011, taking the customer base to 2.5 million, it said.

France, Arcep