Domestic Company Denied
Assignment of Mobile Licences
On December 16 2000 the Swedish National Post and Telecom Agency (PTS) announced the successful applicants for the four nationwide Universal Mobile Telecommunications System (UMTS) licences available in Sweden. The licences were awarded free of charge and decided by a 'beauty contest', which closed on September 1 2000.
The four licences were granted to:
- Europolitan AB;
- Tele2 AB (owned by Netcom AB);
- Orange Sverige AB (owned by France Telecom SA, Bredband Mobil AB, Skanska AB, NTL Ltd and Schibsted AS); and
- HI3G Access AB (owned by Investor AB and Hutchinson Whampoa Limited).
Controversy has arisen because no licence was granted to Telia AB, the former Swedish public telephone operator and the largest telecommunications company in Scandinavia. Telia's application was considered materially deficient with regard to technical feasibility and was disregarded by PTS during the first step of the two-tier evaluation. Being denied a UMTS licence is possibly the biggest failure that Telia has been subject to in its 100-year history.
PTS explained its decision by stating that Telia does not fulfil the requirements for geographical coverage, falling short of the target by some way. According to PTS, the number of base terminals in rural areas must be at least tripled in order for Telia to fulfil the prescribed requirements.
However, Telia claims that although there was much contact between Telia and PTS during the evaluation of the applications, PTS never clarified which principles it would use to evaluate geographic coverage. According to Telia, it was the responsibility of PTS to ensure that Telia knew which method PTS would use to calculate the relationship between the base terminals and geographical coverage.
Within hours of the announcement Telia announced its intention to appeal against the decision. The county administrative court will try the case unless PTS itself decide to alter the decision. An appeal, which may include a request for temporary injunction rejecting the formal validity of PTS's decision, may render the future uncertain for the four successful applicants, since there are only four licences available in Sweden. Should the appeal be granted, one of the four successful applicants will lose its licence. On the other hand, if the licencees await the final outcome of the appellate proceedings, they may not achieve the network capacity they have undertaken in their applications on time. It is estimated that the appellate proceedings will be finalized during the Spring of 2001.
For further information on this topic please contact Rolf Olofsson at White & Case Advokat AB by telephone (+46 8 506 32300) or by fax (+46 8 611 21 22) or by e-mail ([email protected]).
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