Will DT and BT be come last in the UMTS race?

date: 09th February 2001, source by: totaltele.com

Deutsche Telekom and British Telecom will be among the losers in the mobile game, according to a report by Andreas Hoffmann, of Mummer + Partner, a group of management consultants based in Hamburg.

The essential problem for both both Deutsche Telekom and British Telecom, according to the report, is that they will operate in a highly distored 3G market and be unable to spread their costs. Where companies such as Vodafone and France Telecom have presences both in regions where licenses were very expensive - the U.K. and Germany - and in those where they were not - Italy and Spain - Deutsche Telekom and British Telecom are forced to concentrate on high cost countries. This means that DT and BT will not be able to cross-subsidise services in countries where the licenses were expensive with income from those where they were not.

Just how large the difference in license costs was becomes clear when the price per head is compared. According to Mummert + Partner, licenses in Germany cost E619 per head of population, while in the U.K. the cost was E654, and in Italy the price was E239. Even cheaper were Austria at E102, Poland at E50, Switzerland at E18 and Spain, a positive bargain, at E13 per head of population.

At present, Deutsche Telekom has UMTS licences in the U.K. (one2one), Germany (T-mobil), the Netherlands (3G Blue-Consortium), Poland (via a stake in PTC) and Austria (max.mobil).

Hoffmann considers Poland, which is on the threshold of EU membership and has strong economic growth, an "important card in the UMTS poker game". However, he does not consider it the sort of ace that would balance out the lack of licenses in Spain and Italy.

Vodafone has licenses in the U.K., Germany (D2), Italy (Omnitel), Spain (Airtel), the Netherlands (Libertel), Austria (Mobikom), Poland (Polkomtel), Portugal (Telecel), Switzerland (Swisscom) and Sweden. France Telecom has licences in all of the countries in which Vodafone has licenses with the exception of Austria, where a court case between Orange and the shareholders of Connect Austria is currently in progress.

top