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UK wireless success prompts French rethink
Posted: 15-Apr-2000 [Source: FT]

[The UK spectrum auction broke the US$31.8 billion mark this week, and that is prompting France to reconsider its strategy.]

By Alan Cane and David Owen in Paris -- "The French government is reconsidering its policy on allocating next-generation mobile phone licences in light of the spectacular success of the UK's licence auction, which last night broke the 20bn pounds ($31.8bn) barrier.

"The UK auction, which moves into its seventh week on Monday with seven companies still in contention, is prompting most European governments to reassess the value of the mobile cellular service spectrums they have to offer.

"The French economy ministry is believed to be considering introducing an unquantified fixed fee and higher-than-anticipated annual licence fees.

"Christian Pierret, industry minister, told Le Monde newspaper: "It provides for a sort of admission fee that would be added to the annual licence fee, which will be high enough for the State not to be prejudiced".

"Originally, French licences were to be attributed on the basis of the quality of service offered by competing operators. Annual fees would have been relatively low.

"The British auction, however, has changed expectations dramatically. Frederick Knops of consultancy Booz, Allen & Hamilton, said on the basis of the UK example, next-generation licences across Europe could total E25bn-E40bn ($24bn-$38bn).

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