French hope to raise USD3.5bn in 4G auction

17 May 2011

The government of France is hoping to raise EUR2.5 billion (USD3.55 billion) from the sale of fourth-generation (4G) mobile frequency spectrum to telecoms operators, Reuters reports citing the industry minister Eric Besson as saying. The French authorities are reportedly in the final phase of establishing the formal terms and conditions of the 4G auction, including the price, with Besson adamant that the government ‘must not sell its frequencies at cut-price levels’. The country had earlier targeted over EUR2 billion from the sale of the frequency spectrum, but has revised its expectations to match auctions in the US, Sweden and Germany. Moreover, to prevent cash rich firms such as France Telecom (FT) bagging the majority of the spectrum on offer, the government will split the spectrum into various lots to ensure smaller players such as Bouygues Telecom and Iliad can compete.

Arcep will auction spectrum in both the 800MHz and 2600MHz bands. In the former, a total of four lots will be auctioned off carrying a cumulative reserve of EUR1.8 billion. In the 2600MHz band auction, where more frequencies are available, the government is setting a lower asking price. Here Besson is targeting a minimum of EUR700 million from the sale of the target frequencies. The auction is slated to be launched in June, with bids due to be submitted in September and decisions on the winners coming in October (2600MHz band) and November (800MHz band).