New Third-Generation Mobile Telephone Licences

The Spanish Official Journal has published a government resolution approving terms for the award of four individual licences to operate third-generation mobile telephone systems in Spain. This will follow competitive bidding by potential operators.(1)

Third-generation mobile telephone systems (also known as IMT-2000 systems) combine the use of terrestrial and satellite components for the provision of wireless wideband multimedia services. This facilitates flexible and personalized services and supports high-volume data rates. One of the licences will be assigned to UMTS systems, the European IMT-2000 compatible alternative. If there is no application offering UMTS technology, or the applications filed in this modality are considered insufficient, such licence will not be awarded.

The resolution provides that companies may bid as a consortium. If a consortium is awarded a licence, it must incorporate a company to be officially granted the licence.

The closing date for obtaining documents and requesting information is December 1 1999. During the first two weeks of December the government is expected to hold explanatory sessions with all applicants that have filed information requests. Applications are due before January 12 2000.

Applicants should include the following information and documents:

• administrative documentation of the applicant's identity (the members of the consortium if applicable) and its undertaking to fulfil the public service obligations under Law 11/1998;
  
  
• a detailed technical proposal, especially pertaining to the first four years of the licence, including:
  • the technology to be installed;
  • a radioelectric coverage plan;
  • the spectrum to be used;
  • the design and engineering of the network;
  • an environmental plan;
  • quality assurances;
  • network security and confidentiality assurances;
  • the network's connection capacity;
  • a management and information systems plan; and
  • the services to be offered together with a timetable for implementation;
    
    
• business and financial information including the applicant's professional experience in the field;
  
  
• a business plan for the first four years, which should specify the investment plan together with details of any guarantees offered by the applicant;
  
  
• the commercial strategy for the first four years together with any standard agreement that the applicant intends to enter into with customers; and
  
  
• additional documentation supporting any contribution by the applicant's business to Spanish employment and technology.

Applications filed without the correct administrative documentation will be rejected.

The resolution states that the following criteria will be the most relevant for the government:

• the quality of the radioelectric coverage, the spectral efficiency, and the number of radio base stations;
  
  
• the international roaming capacity of the network;
  
  
• the financial and business capacity of the applicant; and
  
  
• the impact of the applicant's business plan on employment, the development of the telecommunications industry and access to the Internet.

The licences are due to be granted before March 15 2000 and will last for a 20-year term, with a single 10-year extension possible upon request. The fee for each licence is Pta 21.7 billion.

Once coverage of the service reaches all urban areas of cities with more than 250,000 inhabitants), the service may begin. This must happen before August 1 2001.

Information on the resolutions and the bid can be found at the Secretaría General de Comunicaciones' web site (www.sgc.mfom.es).


For further information please contact José Pérez Santos, Fernando Pérez de la Sota or Orson Alcocer Rodríguez at Uría & Menéndez by telephone (+34 91 586 0680) or by fax (+34 91 586 0440) or by e-mail ([email protected] or [email protected] or [email protected]).

Endnotes

(1) The resolution was published on November 11 1999. It was passed pursuant to Decision 128/1999/EC of the European parliament and of the council of December 14 1998 on the coordinated introduction of a third-generation mobile and wireless communications system (UMTS) in the European Community, and Law 11/1998 of April 24 1999 on Telecommunications.