Court refuses Telefonica’s appeal for 3G licence refund

The Federal Administrative Court in Leipzig has announced it has rejected an appeal by Spain’s Telefonica to reclaim the EUR8.4 billion (USD12.1 billion) it paid for UMTS frequencies in Germany’s 2000 mobile spectrum auction. Group 3G (Quam) – a consortium between Telefonica Moviles (57%) and Finland’s Sonera (43%) – was awarded a 20-year UMTS licence by then-regulator RegTP in August 2000. In November 2002 Quam shut down the 2G network it had launched as a precursor to UMTS services after only one year in operation, mainly due to spiralling rollout costs. Quam’s licence was later revoked by the regulator, after the operator failed to fulfill network coverage obligations that had been set as a condition of the licence sale. Demanding a refund for the concession, Telefonica went on to appeal the regulator’s decision at the Administrative Court of Cologne and the Higher Administrative Court Munster, though both were unsuccessful. The Spanish company returned to the wireless arena in 2006 with its takeover of O2 Germany, which was also awarded a 3G concession in the 2000 spectrum auction.