On May 31 2001 the French Telecommunications Regulatory Authority (ART) accepted the tenders and recommended the allocation of licences for the development of the Universal Mobile Telecommunications System (UMTS) to the sole tenderers, France Telecom Mobiles and SFR (Vivendi Universal). The allocation procedure, carried out in accordance with Article 36(7) of the Post and Telecommunications Code, brought an end to phase one of a process that was officially launched in December 1998.

Since only two tenders were filed for the four available licences, speculation erupted regarding the outcome of the process. However, the ART decided to proceed with the allocation on the basis that the failure to adopt the new mobile telecommunications system, or a delay in its adoption, would marginalize France's position with respect to its neighbours, partners and competitors.

The ART has confirmed that an additional application process is to be launched in order to award the two remaining UMTS licences. The additional process will be held during the first half of 2002 at the latest to ensure equitable conditions for all candidates. It is now expected that a general rollout will take place in late 2003 at the earliest.

For further information on this topic please contact Eric Morgan de Rivery, Pierre de Girard or Kate Thackeray at Lovells by telephone (+33 1 53 67 47 47) or by fax (+33 1 53 67 47 48) or by email ([email protected], [email protected] or [email protected]).