Europe Working to Make 3G Work

Wireless operators, infrastructure vendors and even governments in Europe are working to make
third-generation (3G) wireless systems profitable.

Executives of European wireless operators have been complaining in recent months that the
costs of infrastructure and acquiring spectrum have lessened the likelihood that 3G service can
be profitable. However, Nokia announced Tuesday that it will help finance a major wireless
operator’s transition to 3G.

In addition, the Financial Times reported that Germany is likely to allow competing wireless
operators to cooperate to provide the faster service. Cooperation is considered one way to
lower operators’ costs.

Nokia announced that Orange and Itineris, both of which are owned by France Telecom, will use
Nokia 3G infrastructure products. The infrastructure will be used by Orange in the U.K. and
Itineris in France. Nokia said it would provide Orange with bridge financing worth about US$1.8
billion.

Separately, Financial Times reported that German regulators are asking holders of 3G
spectrum in that country to submit plans about how cooperation can help ensure their success.


FT reported that cooperation could include mergers or agreements to cooperate on operations. It said that Germany is
considered a linchpin for cooperation throughout Europe because many major European wireless operators have
significant investments in the German wireless market.


FT also reported that BT Cellnet said it was discussing cooperation with its competitors in the U.K. to reduce 3G
infrastructure costs.

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