France chooses beauty contest for 3G license award


PARIS-The French government has decided not to auction third-generation licenses later this year and will instead award the licenses through a “beauty contest.” The government still will raise nearly $19 billion through the process, with each license costing about $4.7 billion.

That amount is much less than the $34 billion the U.K. government made in its auction of five Universal Mobile Telecommunications System licenses last month.

The 15-year French licenses will be awarded in the first half of 2001, with services scheduled to be launched by 2002. Licensees must pay half of the license cost by the end of 2002, with the rest spread out over the life of the licenses.

Three of the licenses are expected to be awarded to the country’s current wireless carriers, France Telecom, SFR and Bouygues Telecom. Companies expected to vie for the fourth license include Deutsche Telekom, utility company Suez Lyonnaise, Spain’s Telefonica, and Canada’s Telesystem International Wireless in partnership with Hutchison Whampoa.

SFR and Bouygues Telecom recently spoke out against an auction. The government also was rumored to be considering a hybrid approach, combining a beauty contest and an auction.

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