Eight parties responded to Luxembourg’s call for interest in operating a second cellular network. The Ministry of Communications, which plans to license an operator later this year, did not comment on interested companies.
Separately, AirTouch Communications Inc. and the partners in Belgian cellular operator Mobistar, Telinfo of Belgium and France Telecom Mobile International, announced plans to seek the Global System for Mobile communications license. A handful of other U.S. and European companies reportedly have applied for the license.
“We cannot put out names until the new communications law passes,” said Edward Wangen, government attache in the Ministry’s office. Luxembourg’s House of Parliament is expected to pass a telecom law addressing market liberalization by May or June, after which the Ministry will launch a formal tender process. Additional parties can apply for the license at that time.
Companies’ plans to achieve national coverage, interest and qualification to operate GSM systems are primary evaluating criteria, said Wangen. The Ministry aims for the new operator to start service in more populated areas in the beginning of 1997. Luxembourg, the country’s capital city, and Esth Alzette are the largest cities.
Luxembourg’s Post and Telecommunications currently is the nation’s sole cellular operator and carries 20,000 subscribers on its GSM network. This represents about 5.9 percent of the country’s 340,000 people.
“They make big money,” said Wangen. Surrounded by Germany, France and Belgium, Luxembourg is home to a high rate of roaming traffic, which accounts for a large chunk of the PT’s network revenues.
The monopoly operator must divulge half of its bandwidth at 960 MHz for the new challenger. Both the PT and new operator will be assessed a license fee, said Wangen, which has not yet been determined.
Why only one new mobile phone operator? “We are not big enough,” said Wangen. Luxembourg covers an area less than 1,000 square miles, which is smaller than state of Rhode Island.
To comply with European Union rules, the country must open its market by 1998.
The PT also operates an analog cellular network, which claims only about 200 users and is scheduled to be shut down, said Luca Tassan of Economic and Management Consultants International Inc. of London.