3G licence fee to be decided within weeks (Ireland)

date: April 22, 2001 - source by: sbpost.ie

Telecoms regulator Etain Doyle will announce the price of the new third-generation mobile phone licences within the next fortnight, according to industry sources.

Third-generation (3G) mobile technology will allow mobile phone users to access internet and multimedia services, including video clips and video-conferencing facilities, at high speed via their handsets. These services will not be available for at least another two years.

Negotiations between the Office of the Director of Telecommunications Regulation (ODTR) and Department of Finance officials over the price of these licences are continuing. Once these are complete, the ODTR can put the four new licences out to tender, allowing potential operators to compete on the range of services and tariffs will offer.

It is understood that discussions have been delayed because of disagreements between department officials and the ODTR over the size of the licence fee. The department is understood to be awaiting a response from the ODTR on a proposal.

The department believes operators should be charged the maximum amount possible for the licences to generate money for the exchequer, but the ODTR wants a lower fee to encourage more companies to apply, and thereby ensure cheaper rates for consumers.

Industry sources predict that the licence fee will be somewhere between £70 million and £100 million -- although, given the downturn in the telecommunications market, it's expected that the price will be at the lower end of this scale.

One telecommunications expert said: "The licence fee needs to be set at a price which discourages spurious bids, but not so high that it would have a negative impact on consumer tariffs."

The British and German exchequers made $20 billion and $30 billion respectively from the sale of 3G licences in their countries.

The ODTR decided last summer to award the licence by public competition -- or "beauty parade" -- to ensure that the operators offering the most attractive services and competitive prices for customers would be chosen.

The ODTR may decide not to ask successful bidders for the full licence fee immediately, but request payment over a five-year period to soften the financial blow. This could also reduce charges for 3G customers.

Ireland is one of only four countries in Europe yet to begin a competition to award 3G licences. The other countries are Luxembourg, Greece and Denmark.

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