OniWay, the fourth Portuguese mobile operator to be awarded a Universal Mobile Telecommunications System (UMTS) licence, is discontinuing its business, as an agreement to sell its assets has been reached with its competitors.

Although it was awarded a UMTS licence, OniWay - unlike the three remaining mobile operators - does not hold a Global System for Mobile Communication (GSM) licence.

Due to delays in the launch of UMTS services, OniWay entered into a roaming agreement with TMN, the leading mobile operator in Portugal, under which it could enter the market before the roll-out of UMTS.

However, Vodafone and Optimus, the other mobile operators, refused to grant interconnection to OniWay, arguing that OniWay did not hold a GSM licence and thus was only entitled to provide UMTS services. A legal battle ensued, but with no practical results for OniWay, as it did not manage to launch its services.

Some market reports stated that the entry of a fourth operator onto the market would reduce not only the overall economic value of the existing competitors, but also their market shares.

Aware of these potential effects, TMN, Vodafone and Optimus presented a €180 million proposal to OniWay's major shareholders requesting that they close down the company and withdraw from the market.

EDP, OniWay's majority shareholder with 68% of its share capital, accepted the proposal and, in spite of opposition from the other shareholders, the deal is almost concluded.

For further information on this topic please contact Margarida Couto at Vieira de Almeida & Associados by telephone (+351 21 311 3400) or by fax (+351 21 354 89 39) or by email ([email protected]).