Bouygues SA, the owner of France’s third-largest mobile phone company, won approval from the telecommunications regulator to use the 1,800 megahertz band to offer faster services from Oct. 1.
Bouygues will indicate “in coming days” whether it accepts the offer, which requires it to give back 2.8 megahertz of 1,800 frequencies by Oct. 1, the Paris-based company said in a statement today.
Bouygues must return about 10 percent of its frequencies in very densely populated areas to start a so-called fourth-generation service, Jean-Ludovic Silicani, the head of the regulator, said on BFM Business radio today. It will also have to pay the state about 60 million euros ($78 million) per year to provide 4G services on the 1,800 megahertz band, up from 13 million euros, he said.
France Telecom SA has lobbied against the regulator’s decision because it agreed a roaming contract with France’s fourth-largest phone company Iliad SA which is crowding its 1,800 frequencies, forcing it to deploy separate 4G equipment. By contrast, Bouygues can upgrade its existing equipment and software in the 1,800 frequencies to roll out its fourth-generation services.
Iliad SA started a discount mobile-phone service in January 2012, triggering a price war that has dented earnings of France Telecom, Bouygues and Vivendi’s SFR, France’s third-largest mobile phone company.
France Telecom “regrets this decision which, far from calming a market that’s already strongly destabilized, is creating a new shock by providing a player with an advantage that de-facto can’t be repeated by its competitors,” said Tom Wright, a spokesman at France Telecom, in an e-mailed comment to Bloomberg.