Spain Offers 3G Respite

The Spanish government has lessened the burden on the country's four 3G license holders by handing back more than €5 billion ($5.2 billion) in bank guarantees that had been set aside for investment in UMTS networks.The total held has now been reduced to €1.3 billion from the original €7.4 billion stashed in government coffers, according to Dow Jones Newswires. €900 million had previously been returned to the quartet of Amena, Telefónica Móviles SA, Vodafone Spain, and Xfera (no website). This time, Xfera had €1.84 billion returned, Amena got €1.68 billion, and Vodafone and Moviles both received €800 million. The operators, which were awarded their licenses in March 2000 following a "beauty contest," persuaded the government that the money could be better used to aid their current business plans. The conditions attached to the return of the cash are that commercial services should begin by the summer of 2004, and that at least three different 3G phones should be available at that time. The original timetable had included a launch date of August 2001, subsequently pushed back to June 2002 -- though these dates were always regarded as fanciful by the operators, which were concerned that government officials were too willing to believe equipment suppliers' announcements about delivery times and product capabilities. Spain's willingness to be flexible contrasts with Sweden, which has refused to budge over timescales and license conditions. As a result, Orange SA (London/Paris: OGE) decided earlier this month to abandon the Scandinavian country rather than spend further resources on its UMTS rollout there (see Orange in Swedish U-Turn).— Ray Le Maistre, European Editor, Unstrung
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