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Mr Chirac described the industry as in ruins and undergoing a deep crisis owing to a lack of political direction. The crisis in this industry is due to "excessive and what I think is irresponsible taxation when the UMTS (3G) licences were being awarded", Mr Chirac told reporters after the latest EU Summit in Brussels. He also blames the problem on the "lack of European policies when the allocation process was underway, which has led to the sector's downfall". He is going to press the European Commission to table proposals "as soon as possible" so the March 2003 Summit can take suitable steps. Mr Chirac said the crisis has already resulted in the loss of 200,000 jobs in Europe.

In his letter, the French president expresses "his concern for the situation of the telecommunications sector (operators and equipment suppliers) in Europe of which is currently going through a major crisis". "European countries were overly optimistic" and governments demanded "totally disproportionate" amounts of money from telecoms companies for licences to operate new high-speed mobile networks, he said. "The consequences today are very severe. Market growth is lower than predicted, investment down, with a direct negative impact on employment, a collapse in...

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