- Sweden awarded four third-generation (3G) licences on Saturday. The nation's incumbent telecommunications operator Telia failed in the so-called "beauty contest" model in which licences are awarded based on business plans.
The Swedish National Post and Telecom Agency (Post & Telestyrelsen - PTS) said in a statement that Telia's bid was rejected due to "deficiency of technical feasibility."
Telia is the first leading national carrier in Europe that failed to secure a UMTS (Universal Mobile Telecommunications System) licence on its own turf. The company immediately announced it will appeal the decision.
Telia says it was "extremely surprised." The company says it feels it fulfilled all the important criteria. "We will review our application once again, and then make an appeal," says Kenneth Karlberg, senior executive vice president of Telia and chief executive officer of Telia Mobile.
Telia says there are alternatives to operating its own network. It mentioned offering service over a competitor's network, as a VNO (Virtual Network Operator). The company says it "will be able to offer mobile broadband services, including UMTS, at the same time as the other actors in the Swedish market."
Licences were awarded to Telia's competitors on Sweden's mobile phone market -- Tele2, a unit of Netcom, and Europolitan, majority owned by UK-based Vodafone. The last two licences went to Orange Sverige, a consortium including France Télécom, and HI3G, a group made up of Investor and Hutchinson Whampoa of Hong Kong.
All four licencees have committed to providing coverage to at least 99.98% of the Swedish population as early as the end of 2003, PTS says. Even the rural parts of the country will be covered. PTS had emphasised broad network coverage as one of the most important criteria in the contest.
PTS said it received 10 applications for 3G licences. In the initial consideration, PTS examined whether the operators' commitments concerning coverage and development were fulfilled. PTS also examined financial, technical and commercial feasibility, as well as the applicants' competence and experience with mobile telephony. In other European countries 3G licences were sold to the highest bidders.
Consortia including Germany's T-Mobil International, Spain's Telefonica, and Finland's Sonera also were denied licences.