Orange, the mobile phone operator, has asked Swedish authorities to relax the terms of its third-generation (3G) licence and to give it an extra three years to build a network capable of providing national coverage.
The request to extend the deadline to the end of 2006 was made to the Swedish Post and Telecom Agency yesterday. Orange is the first of the country's four licence holders to have asked for a delay.
The company, a subsidiary of France Telecom, also asked to have its roll-out obligations lowered, reducing coverage to 8.3 million people and not 8.86 million.
The request comes as France Telecom struggles under a €63 billion debt mountain and looks to resolve a conflict with its MobilCom subsidiary over the high cost of 3G investment in Germany.
It also comes less than two weeks after Finland's Sonera and Spain's Telefónica abandoned plans to develop jointly a greenfield 3G network in Germany, writing off an investment of €8.4 billion.
The outcome of Orange's request will attract great interest from rivals in the Swedish market. Four other operators - Telia, Tele2, Vodafone and Hi3G, a unit of Hutchison Whampoa - are committed to providing 3G services.
Unlike countries such as Britain and Germany, Sweden did not hold an auction but gave the licences away almost free of charge. However, strict conditions were set on operators in order to ensure a fast roll-out and national coverage in a country where large areas are only sparsely populated.
Telia, the country's largest operator and a former shareholder in Eircom, failed to win a 3G licence and has since been forced to share a network with Tele2. At the time of its failure, Telia said companies had won licences by making unrealistic claims.
Along with Hi3G, Orange has been seen as one of the weaker players in the Swedish market, as it is a new entrant without a history as a GSM operator. Orange is the only operator in the market that has not formed a partnership to cut the cost of building the network. In addition to the Telia-Tele2 pairing, Vodafone and Hi3G agreed to build a joint network. - (Financial Times Service)
