France gets bids in 4G telecom auction

Reuters

France's telecoms regulator has received bids from all of the country's major operators for a second batch of higher-quality fourth-generation (4G) mobile licenses and will choose winners in the coming weeks.

ARCEP, the French agency in charge of regulating telecommunications in France, said in a statement on Thursday that France Telecom SFR, Bouygues and Iliad – all headquartered in Paris - had submitted offers but did not disclose how much each company had bid.

The French government aims to raise at least $2.33 billion in the second phase of the auction, which offers "golden frequencies" in the 800 MHz band, so dubbed because they allow mobile signals to travel long distances without losing strength.

France has already sold off a batch of frequencies in the 2.6 GHz band for $1.2 billion, representing a premium to what similar frequencies sold for in some neighboring European countries. In the first round, France Telecom and soon-to-be new mobile player Iliad won two larger blocks of 20 megahertz, while SFR and Bouygues got 15 MHz each.

Analysts predicted that SFR, the country's second-biggest mobile operator, would bid aggressively in the second round since it had not received as much spectrum as it wanted in the first.

As a result, the French government may end up raising more than the $3.2 billion minimum it set for the 4G licenses, a boon that would be welcomed in a time of tight national budgets.

The results of the auction will shape the competitive landscape in France's telecom market for years to come. The amount of spectrum an operator has determines the quality of service it can offer customers surfing the web from smartphones or tablets, a lucrative and fast-growing market.

With Iliad set to launch its mobile service in the coming days or weeks, France's telecoms market has been in a phase of intensifying competition and declining prices in the past year, and analysts expect that dynamic to continue.

Iliad's approach to the second round of the auction - whether it bids aggressively for the best frequencies or not - is likely to be interpreted as a sign of its ambitions in the mobile market. Already Iliad, which markets its offers under the Free brand name, surprised in the first round by winning one of the bigger blocks over larger rival SFR.

Similar 4G auctions have been carried out in Spain, Germany, and Italy, while the UK has delayed its auction until next year.

 (Reporting by Leila Abboud; Editing by James Regan)

ArticleTools