European Union to OK Sharing Cost of Building Mobile Networks

The EU Competition Committee argues that sharing the cost will benefit consumers, though the proposal has yet to obtain final approval.

by / September 10, 2002
BRUSSELS, Belgium (AP) -- Europe's embattled mobile phone operators received good news Tuesday when European Union regulators provisionally agreed to allow them to share the costs of building fast, third-generation data networks.

The European Commission said it intends to allow Deutsche Telekom AG subsidiary T-Mobile International AG and Britain's mm02 PLC to build base stations and other infrastructure in Britain and Germany.

"Such cooperation deals can bring benefits for the consumer in terms of a faster introduction of new services, more competition and a lesser impact to the environment," said EU Competition Commissioner Mario Monti.

The announcement allows companies to share the base stations and antennas and also permits them to share radio-access networks, which include the actual switches that complete mobile phone calls.

Final EU clearance still depends on regulators considering comment from competitors or other interested parties.

European mobile phone operators have spent more than 115 billion euros ($113 billion) buying 3G licenses, creating a mountain of debt.

Company executives estimate network cooperation could shave about 30 percent off investment costs estimated to run to 5 billion euros ($4.9 billion) in both Britain and Germany.

Monti warned that he would remain "vigilant to protect competition in mobile phone markets." In particular, he said he would not allow operators to share services provided directly to consumers.

3G networks are designed to offer high speed Internet access, including the ability to send high-resolution pictures and CD quality music.

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