Network sharing rules could thwart next telecom roll-out

Date: 03/05/01

By Peter Chapman

THE world's biggest telecom technology company is warning anti-trust chief Mario Monti that restricting network sharing may thwart the roll-out of the third generation of mobile technology.

The firm, Nortel Networks, is responding to concerns expressed by Monti to the European Parliament that cash-strapped mobile firms may fall foul of anti-trust rules by sharing '3G' technology to save the huge costs of building their own infrastructure.

Philip Hargrave, the Canadian firm's chief European scientist, told European Voice that network sharing does not mean firms would cease to compete with each other. And stopping them from doing so would thwart a market already reeling from massive licence fees levied by many governments.

"In the past, many people have shared capacity on optical fibres," he said. "Several rival networks sharing does not imply necessarily any loss of competitiveness. If it can aid rolling out of networks, let's debate it - there is a lot at stake here."

Monti told the Parliament's economic and monetary committee last Tuesday (24 April) that he thought there could be competition issues in mobile markets in which there are only a few operators.

This is likely to be the rule rather than the exception since only a few companies per member state have been able to stump up the cash for licence fees to operate new services.

But Monti said some forms of sharing would involve greater restrictions than others and added that the Commission had not yet started to investigate specific cases.

Nortel Networks makes both 'fixed' and wireless telecom systems, as well as much of the behind-the-scenes technology that runs the Internet.

Hargrave said completing 3G networks in Europe would help people to access the Internet on the move - in the same way that many are already using it in their offices and workplaces.

"If we can aid the roll out of 3G and put in place the final piece of the jigsaw it would be of great benefit for Europe," he said.

"If we view it in isolation it could slow things down."

He said his company was stepping up its lobbying activities in Brussels to fight on this and other issues, such as the EU's draft telecoms laws which are designed to loosen the regulatory grip on the sector, while ensuring fair competition.

Nortel's European bid to keep 3G services on the rails follows the announcement of dismal sales figures for the first quarter of 2001 - in common with other technology firms.

The company's CEO, John Roth, blamed its poor figures on a dry-up of investment from telecom operators, mainly in the US.

He said the company's financial recovery now hinges on whether operators decide to add new capacity to carry data and voice over their increasingly clogged networks.

Monti's spokeswoman Amelia Torres says there is no conflict over the issue with telecoms chief Erkki Liikanen, who has said network sharing is an option under consideration.

The world's biggest telecom technology company is warning anti-trust chief Mario Monti that restricting network sharing may thwart the roll-out of the third generation of mobile technology.