Swiss Cool to 3G Concession

Switzerland's Federal Communications Commission (ComCom) thought it was doing the country's 3G license-holders a favor when it relaxed the network rollout timescales recently (see Swiss ease 3G conditions). But it appears it will take more than a shifting of the sands to please the operators.

When four companies -- Swisscom Mobile, Orange Communications SA, Sunrise, and 3G Mobile AG -- were awarded the licenses in December 2000, their first mandatory challenge was to achieve 20 percent population coverage with their UMTS networks by the end of 2002. At the time that didn't seem to be too much of a hindrance. Now ComCom has taken into account that things have changed.

"We decided to eliminate the [20 percent coverage by end of 2002] condition, but retain the condition that the operators must achieve 50 percent population coverage by the end of 2004," ComCom president Dr. Fulvio Caccia told Unstrung. "When we awarded the licenses the 20 percent target was realistic. But there are many delays with the infrastructure and terminals and in the development of new services."

Caccia adds that the service providers also now have free rein to launch their services when they feel they are ready, and ComCom is sure they will not delay once everything is in place. "This will help avoid the disillusionment that was created when WAP services were launched. UMTS is too important in the development of wireless communications. The operators must decide for themselves when it is the best time to launch."

According to Caccia there was a mixed response to the decision. "Sunrise and 3G Mobile were agreeable, but Swisscom and Orange were not happy. Orange criticized the decision but will still take advantage of the decision by putting back their launch date." He says this is proof that the operators are not ready to launch and that the decision is a good one for all involved.

But try telling that to the license holders. As the only newcomer without existing GSM sites to use for its UMTS rollout, Telefonica Moviles SA–owned 3G Mobile has the most to gain from the decision. But David Bowler, the operator's head of regulatory affairs and institutional relations, seemed far from pleased. "This decision has not gone any way towards relieving our concerns. All the operators are 18 to 24 months behind schedule because of a debacle with the environment agency, let alone a lack of infrastructure. Removing the first hurdle does not give us a chance to make up this time. We want to see stage two [50 percent by end of 2004] put back by 18 to 24 months."

Local as well as national environmental issues have contributed to delays, adds Bowler. "These people at the environment ministry are fundamentalists. They want a mobile network that doesn't produce any radio signals at all! Switzerland has the strictest laws governing non-ionizing radiation in Europe, maybe even the world. It's 10 times less than in the EU countries." And that's at a national level, never mind at a local level. "The Cantons each have their own local guidelines as well, and all this has made rollout very difficult. We have clearer guidelines now, and are able to obtain permits and select sites, but we believe there should be more recovery time," says Bowler.

So when will 3G Mobile begin its 3G service, and using whose equipment? "I can't say whose equipment we are going to use, or whose handsets. We have a date for launch, but that hasn't been made public. As for the others who say they have the coverage already, well, it's our opinion that is just a pilot signal they can offer, not a proper UMTS signal," he jibes.

Pia Rogers at Swisscom Mobile is less effusive but offers more in the way of detail. "We are going to meet the deadline anyway, so all the [ComCom] decision has done is hand an advantage to those who would not have been ready." It is deploying Ericsson AB (Nasdaq: ERICY) base station equipment and will source its handsets "mostly from Ericsson," says Rogers. And launch date? "There is no date set but it won't be before 2004."

Orange, which is to deploy Nokia Corp. (NYSE: NOK) base stations, can see little reason for the regulatory change. "We always said we would be ready, and we have 400 antennas already in place," says spokeswoman Marie-Claude Debons. (Orange believes between 120 and 150 sites is enough to attain 20 percent coverage.) A prepared statement says the main issue for the operator is customer service, and it will still offer UMTS service to its customers as "fast as possible." So when is that? "Mid-2003," says Debons.

Staff at Sunrise, which has Ericsson as its UMTS equipment supplier, found themselves unable even to answer a phone or respond to repeated requests for a return call, so we will have to take Dr Caccia's word that it is agreeable to the change in conditions.

Despite the bravado of Swisscom Mobile and Orange, this decision does ease the pressure for them in terms of testing the network and services throughout the country. It certainly gives 3G Mobile a break, despite its protestations that ComCom has not gone far enough. And in a country with just over 7 million people, more than half of whom are Swisscom Mobile 2G customers already, the new entrant might need all the help it can get once handsets are available and the networks activated... whenever that might be.

— Ray Le Maistre, European Editor, Unstrung
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