Dispute looms over mobile phone licences

Date: 14/03/1996

A COALITION of EU countries is likely to torpedo plans to allow the Union, rather than national governments, to decide which operators should be granted licences to run mobile phone services via satellites in space.

Germany, France, the UK and the Nordic countries are firmly opposed to what they see as an attempted erosion of their national sovereignty, making it unlikely that agreement will be reached on the Commission plan at a meeting of EU telecoms ministers next week.

Personal satellite communications, as they are known, allow users to contact people in far-flung parts of the world which GSM terrestrial mobile phones cannot reach. But because such systems send voice and data signals along limited frequencies, phone companies must get licences to operate them.

While Germany and its allies are in favour of coordinating Europe's differing licensing policies, they want to do so on a voluntary basis, perhaps through the European Conference of Postal and Telecommunications Administrations (CEPT).

“There is plenty of space for everyone, so I really do not see what all the fuss is about,” said one UK diplomat, adding that only a handful of EU operators were interested in providing satellite services.

“We see no reason why national governments cannot issue licences. To grant that power to the Commission would be to add a totally unnecessary layer to the licensing procedure.”

But not everyone agrees. Otto Björklund of Nokia insists that a disjointed approach will lead to traffic jams in space which, in turn, will cause consumer frustration.

“If we do not have a single licensing system, then signals will inevitably get congested,” he says. “If national authorities start handing out licences left and right, how can users be sure that their phones will work? They cannot.”

But it is not only the prospect of dissatisfied customers which worries Björklund. He, and other representatives from mobile phone companies, are decidedly concerned about the US, which has already handed out three licences to set up what will in effect be global personal communications systems.

Most recently, Teledesic, a joint venture part-run by Bill Gates of Microsoft, was awarded radio frequencies to operate world-wide satellite services. The EU, however, had no say in the decision, prompting concern in certain circles.

“Who gave the US authority to hand out global licences unilaterally?” asks Björklund.

His worry, along with that of the Commission, is that if Europe does not present a united front, it will lose the race for space, allowing the US to gobble up most of the frequencies and - more importantly - most of the business.

Because of the global nature of the satellite phone business, operators licensed to work in the US are also automatically licensed to provide services in the EU.

So far, the Commission has done little more than huff and puff about America's unilateral action, probably because complaining is about all it can do for the moment.

One official suggested that moves were afoot to coordinate licensing on an international basis, but refused to elaborate.

“America took an autonomous decision on licensing, so this is a trade issue because it prejudges the granting of licences in Europe, which we will have to sort out.”

In the meantime, however, he insists that “Europe should also take autonomous decisions, rather than be held hostage to American ones”.

Mobile phone companies such as Nokia, which is hoping to launch dual-purpose phones to pick up satellite and terrestrial signals by the end of the decade, agree.

Whether their views are heard remains to be seen. But, given the dissent evident among member states during preparatory talks, a decision is unlikely to emerge at the telecoms meeting scheduled for 21 March.