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Vivendi warns against French mobile auction
Posted: 21-May-2000 [Source: FT/Reuters]

[Vivendi CEO talks about his 3G auction concerns in a Sunday French newspaper interview.]

"The boss of French communications group Vivendi said on Sunday the government would be guilty of "short-term speculation" if it sold off its highly coveted new age mobile phone licences to the highest bidder, like Britain.

"Jean-Marie Messier, whose company withdrew from the race for similar Internet-friendly phone licences in Germany because of a Berlin's decision to sell by auction, said bidders would end up paying more than they could ever recover if France did the same.

"You cannot just award a licence on the basis of a stack of bank bills on the table, without taking the quality of services proposed to consumers," Messier, chairman of Vivendi, told the Journal du Dimanche in an interview.

"If France goes for the licence prices fetched in Britain, the UMTS netowrks will never be absorbed," he said.

"Messier, whose telecoms and utility empire includes the SFR mobile phone company, is not the first French contender to warn against copying an auction which smashed all estimates to raise 22 billion pounds ($32.6 billion) for five so-called UMTS licences.

"He said many other governments - from Japan to Spain and the Scandinavian countries - had decided to attribute licences at more moderate prices on the basis of the contender's plans, and that this allowed firms to put their cash into development.

"Throwing it out to auction would be tantamount for the state to adopting the attitude of a short-term speculator," he said. "That's not the role of the state."

"Third-generation UMTS (Unisersal Mobile Telecommunications System) technology will replace GSM equipment across Europe in the coming years and the licences are seen as crucial to survival in an increasingly integrated and cut-throat market.

"Telecoms and media firms are falling over each other to get their hands on licences which would allow them to offer everything from pizza and plane ticket reservation to stock market trading and traffic monitoring via fast-loading cellphone screens.

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