By Sam Schechner
PARIS--France's telecommunications regulator gave the green
light to the country's third-largest mobile phone operator to
repurpose a tranche of radio spectrum for a new ultra-high-speed
service, rejecting public lobbying by competitors that such a
decision would confer an unfair advantage.
French regulator Arcep said Thursday that it would allow
Bouygues Telecom, a unit of Bouygues SA (EN.FR), to use spectrum in
the 1,800 Mhz band, which is currently earmarked for basic,
so-called 2G, for the newest standard, dubbed 4G or LTE. The move
could take effect as early as Oct. 1.
Competitors, including France Telecom SA (FTE.FR) and Vivendi
SA's (VIV.FR) SFR--respectively the No. 1 and 2 operators in France
by subscribers--had opposed Bouygues' request to repurpose the
spectrum. They argued that France's operators had bid just over a
year ago in an auction for other wireless spectrum for 4G LTE, and
that allowing Bouygues to use 1,800 Mhz amounted to changing the
rules in the middle of the game.
Those two operators also have spectrum in the 1,800 Mhz band,
but it is more heavily used than Bouygues', making it difficult for
them to make a similar switch, executives at the operators have
said.
SFR said Thursday that the decision, if implemented,
"substantially changes the competitive and economic framework in
which we made our bids," adding, "the government and Arcep appear
to have misunderstood the principle of legitimate
expectations."
France Telecom said it "regrets this decision which, far from
calming an already highly destabilized market, creates a new shock
by giving one player an advantage that its competitors cannot
match."
Arcep rejected the complaints.
"We weren't convinced that the impact would be negative," said
Jean-Ludovic Silicani, chairman of Arcep in an interview on BFM
radio, minutes after the decision was announced. "It will incite
all operators to accelerate the roll-out of 4G service," he
added.
A spokeswoman for Bouygues Telecom didn't immediately respond to
a request for comment.
Write to Sam Schechner at sam.schechner@wsj.com
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