TELECOMMUNICATIONS/FRANCE: BOUYGUES IS ONLY APPLICANT FOR UMTS LICENCE.
Position | Bouygues Telecom |
In order to ensure the success of the second tender process, the initial cost of Euro 4.95 billion had been reduced to a mere down-payment of Euro 619 million, plus a 1% tax to be levied on the operators' future revenues. In addition, the duration of the licences was extended from 15 to 20 years to
compensate for the delay in launching the services, which are not expected to be available to the general public until 2004.With the sale of three licences, the French government will reap Euro 1.85 billion, plus the amount levied from the UMTS operators' revenues. But this is a great deal less than the Euro 19 billion that was expected when the first invitation to tender was issued in August 2000, and even less than the astronomical sums paid in Germany (Euro 50.8 billion) and the UK (Euro 38.4 billion) in the Spring of 2000. The bursting of the dotcom bubble, in March 2000, disrupted the sale of the licences in France by casting a dark shadow over the telecom industry's prospects, and borrowing levels in the sector suddenly seemed excessive to investors. The crisis in telecommunications also fostered doubts about the success of UMTS and forced operators to...
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