French Telecom Regulator Allows Bouygues to Use 1800Mhz Spectrum for 4G from Oct 1

By Sam Schechner

PARIS--France's telecommunications regulator gave the green light to the country's third-largest mobile phone operator to repurpose a tranche of radio spectrum for a new ultra-high-speed service, rejecting public lobbying by competitors that such a decision would confer an unfair advantage.

French regulator Arcep said Thursday that it would allow Bouygues Telecom, a unit of Bouygues SA (EN.FR), to use spectrum in the 1,800 Mhz band, which is currently earmarked for basic, so-called 2G, for the newest standard, dubbed 4G or LTE. The move could take effect as early as Oct. 1.

Competitors, including France Telecom SA (FTE.FR) and Vivendi SA's (VIV.FR) SFR--respectively the No. 1 and 2 operators in France by subscribers--had opposed Bouygues' request to repurpose the spectrum. They argued that France's operators had bid just over a year ago in an auction for other wireless spectrum for 4G LTE, and that allowing Bouygues to use 1,800 Mhz amounted to changing the rules in the middle of the game.

Those two operators also have spectrum in the 1,800 Mhz band, but it is more heavily used than Bouygues', making it difficult for them to make a similar switch, executives at the operators have said.

SFR said Thursday that the decision, if implemented, "substantially changes the competitive and economic framework in which we made our bids," adding, "the government and Arcep appear to have misunderstood the principle of legitimate expectations."

France Telecom said it "regrets this decision which, far from calming an already highly destabilized market, creates a new shock by giving one player an advantage that its competitors cannot match."

Arcep rejected the complaints.

"We weren't convinced that the impact would be negative," said Jean-Ludovic Silicani, chairman of Arcep in an interview on BFM radio, minutes after the decision was announced. "It will incite all operators to accelerate the roll-out of 4G service," he added.

A spokeswoman for Bouygues Telecom didn't immediately respond to a request for comment.

Write to Sam Schechner at [e-mail]

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