RealTime IT News

Portugal Opens UMTS Bidding

[Madrid, SPAIN] Following the lead of other European governments, Portugal's Institute of Communications (ICP) opened shop this week for bids on third-generation mobile phone licenses. While outsiders are eligible, current operators are well-poised favorites for three of the four licenses

Companies will have until September 29 to present the ICP with technical and business plans in order to be eligible for the licenses awarded at the end of this year. Universal Mobile Telecommunications System (UMTS) technology, which allows for high-speed mobile Internet connections of up to 2Mbps--should reach Portuguese consumers by January 1, 2002.

Mobile telephony in Portugal is currently dominated by three operators: TMN (Portugal Telecom), Telecel (Vodaphone Airtouch) and Optimus (France Telecom). Observers consider these companies the most likely recipients of third-generation licenses.

"None of the three operators currently licensed for GSM and DCS technologies will automatically be granted an IMT2000/UMTS license, though the terms of the contest will value those proposals that reinforce national roaming between third and second generation systems," said the ICP.

A strong contender for the fourth license is Jazztel, which is Portugal Telecom's strongest competitor after the country's recent liberalization of the telecommunications sector. Jazztel, with more than 975,000 clients in both Spain and Portugal, is now Spain's third telephone operator, building up a telecommunications infrastructure throughout the Iberian Peninsula.

Jazztel, observers say, could potentially form an alliance with a second company such as Deutsche Telekom, British Telecommunicaction or Telecom Italia to improve its chances of license approval.

Many European companies have formed consortia in order to up their chances of license approval. Companies fearful of missing out on the UMTS action have paid high prices for licenses across the continent, though analysts say earnings may not cover the exaggerated price tags.

Finland and Spain were the first countries to grant UMTS licenses. Bidding reached great highs this week as competitors vied for the highly coveted German market.