Nearly two years after Airtel Movil SA became the second Global System for Mobile communications licensee in Spain, the company and its competitor, Telefonica Moviles, have resolved issues and created a level playing field, said AirTouch International, one Airtel partner.
Specifics of the recent resolution have not been released, said Amy Damianakes, corporate spokeswoman for AirTouch Communications Inc.
Airtel received its license through competitive tender in October 1995 with a bid of about $59.4 million, while Telefonica, the state telephone operator, paid nothing for its license, granted in 1991.
In the interest of fairness, the European Commission more than a year ago urged the Spanish government to compensate Airtel or require Telefonica to pay a fee for its license. In January, the EC firmed its demand and said the government must design a plan within three months. “In the absence of a license fee imposed on Airtel, price competition would have been stronger and GSM tariffs would have fallen more quickly,” said the EC.
One foreign publication reported that the EC accepted proposed terms for a resolution in April, which included extending Airtel’s GSM license term from 15 to 25 years and interconnection rights with Telefonica. Under the Spanish government’s proposed terms, Airtel also would receive its first $3.5 million in interconnection fees for free.
Spain intends to license operators at 1.8 GHz for Digital Cellular System 1800 services. Airtel could receive a DCS 1800 license without paying a fee, under the new resolve.
Among European Union members, Spain has been one of the slowest in opening its wireless market.
Airtel is owned by AirTouch, British Telecommunications plc and several Spanish financial firms.
