HELSINKI, Finland-Tele2, Sweden’s second-largest network operator, has threatened to “hand back” its Norwegian third-generation (3G) license unless regulatory authorities in Norway relax the terms under which the license was granted and permit Tele2 to delay the rollout of its 3G network in Norway.
Norwegian authorities have agreed to meet Tele2 representatives, but are noncommittal on granting an extension to the original rollout deadline.
“The situation we are in is serious. We are talking to officials in Norway, but if we do not secure a positive decision soon we will be placed in a position where we will have no alternative but to hand back our license,” said Tele2 Chief Executive Officer (CEO) Lars-Johan Jarnheimer.
Tele2 stands to save US$530 million if it withdraws from 3G commitments in Norway. According to Jarnheimer, the Norwegian regulator wants the company to complete the construction of 1,700 masts by 1 December.
As of 1 September, Tele2 had installed 28 cellular base stations in the Oslo area, far short of its required 1,700 quota by the 1 December deadline. Jarnheimer described the deadline as “crazy.”
“We are reluctant to make such a large investment so quickly when the latest data shows that there are no handsets, and no possibilities of generating a single cent of revenue. This is not quite reasonable,” said Jarnheimer.
Norway awarded four 3G licenses in a beauty contest in 2000. One of the holders, Enitel, was declared bankrupt in 2001, and its license is to be auctioned.
In a related development, Tele2 has signed a strategic five-year two-way MVNO agreement with Telenor, Norway’s leading mobile operator, covering 3G and GSM services (see related “Europe” news). The agreement covers access to Universal Mobile Telecommunications System (UMTS) networks in Norway and Sweden.
The deal ensures that Tele2’s customers in Norway have access to 3G services. The agreement means that Tele2 and Telenor will use each other’s services.
The fact that Tele2 is building a 3G network in Sweden in partnership with Telia, Telenor’s traditional arch rival, does not appear to have complicated negotiations. Tele2 has sold mobile services in Norway on bandwidth bought from the Telenor group. Telenor has around 72,000 reseller subscribers in Sweden through Europolitan Vodafone’s second-generation network.
