Europe's 3G Shrinkage

And then there were three. That's what they'll be saying in Portuguese UMTS circles this week. Startup OniWay is exiting the market before it even launched its network or offered any service, and is considering bids for its assets from the trio of remaining 3G license-holders. Optimus, Vodafone Telecel, and Portugal Telecom, SGPS, S.A. are now scrapping over the network assets on which Oniway reportedly spent €300 million. It had also spent €100 million on its license, and analysts believe it would have to spend a further €700 million to €900 million to make an impact on the market. Oniway is 20 percent owned by Norwegian telco Telenor ASA (Nasdaq: TELN). At least Portugal has only lost one 3G hopeful (so far). Germany has lost two of its original six, in the form of MobilCom AG and Group 3G, a.k.a. Quam (see Quam Quits for Good and MobilCom's Monster Q3 Debt). Unstrung wonders why Portugal had four UMTS competitors in the first place. It has just over 10 million people and nearly 8 million mobile subscribers, giving it the highest mobile penetration in western Europe. Not that having four competitors in a country that size is by any means the most ridiculous distribution of 3G licenses. Little Luxembourg has about 450,000 residents and three 3G licenses, while the small Channel Island of Guernsey has just 65,000 inhabitants and a mindless local government that wants to award two 3G licenses. Don't all rush at once. — Ray Le Maistre, European Editor, Unstrung
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