French government sweetens 3G license terms

PARIS—The French government has dramatically reduced its upfront cost of third-generation (3G) licenses and extended the license terms to 20 years from 15 years.
The initial payment for a French 3G license will fall to $561 million compared with the original $4.5 billion. Future payments will be based on 3G revenues made by mobile operators.
The move comes just weeks after France’s Vivendi-backed SFR withheld its initial payment for its 3G license for two days in protest of high fees and license terms and demanded further negotiations with the government on the issue. The other French 3G license holder, Orange, also has complained of the license terms, originally set during better economic times for the wireless industry last year. France’s third mobile operator, Bouygues Telecom, declined to bid for a 3G license because of the high costs.
France is likely to sell its two remaining 3G licenses, not yet awarded, by the end of the year, according to international press reports. Foreign firms could have renewed interest in the French market, which received a cool reception to its first attempt at awarding 3G licenses, based on the new conditions.