EU Aims To Boost 3G Usage By Opening Up Mobile Frequencies

BRUSSELS -(Dow Jones)- In a bid to mollify angry mobile phone companies, the European Commission plans to make it easier for operators to roll out third-generation broadband services, a Commission official said Tuesday.

The changes will allow the phone companies such as Vodafone PLC and Deutsche Telekom to send products such as video clips and fast-speed Internet access over radio frequencies now limited to slow speed so-called second-generation services.

In order to do this, the EU must ask the European Parliament and governments to abolish a two-decade-old law on radio spectrum. The official, who declined to be named, said he expected the other European authorities to approve the change, which he said could go into effect this year.

The impact on the industry's bottom line could be profound, he added, with estimates running between EUR10 billion and EUR50 billion. It would allow operators to avoid buying more spectrum on government auctions and allow them to use existing infrastructure.

Many in the industry applauded the move. "It would allow a more efficient use of spectrum," said David Pringle, a spokesman for the GSM association, representing more than 690 GSM mobile phone operators.

But operators without existing second-generation networks are likely to be upset. These include new entrants such as Hutchison Whampoa, which has spent heavily to buy third-generation licenses.

The move also represents an effort to placate the mobile phone operators who have been furious about the Commission's plans to slash their lucrative charges for connecting foreign roaming calls. The E.U. official said this regulatory change on third-generation services would compensate operators for their losses on roaming "ten times over."

-By William Echikson, Dow Jones Newswires; 32-2-741-1480; william.echikson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 13th February 2007