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Telefonica Loses Appeal Over $12 Billion 3G License Refund

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Telefonica has lost a lawsuit in Germany over its demand for a refund of the EUR 8.4 billion (USD12 billion) fee paid for a 3G license in the massive license auctions of 2000.

Telefonica set up a 57:43 joint venture with Finland's Sonera, called Group 3G to bid for the 3G license. The company, trading by then as Quam, launched an initial service in November 2001 using the E-Plus GSM network, but the following year announced that it would not be building a 3G network after all as part of a general retrenchment of its European operations.

The company was later ordered to surrender its 3G license after it was deemed to have missed the rollout deadlines imposed as a condition of the license. The company has since sued to seek a refund of the license fees.

Telefonica wrote off its investment of EUR 4.9 billion in the company in July 2002, but re-entered the market following its takeover of UK based O2 in late 2005, which owned a German GSM/3G network.

The ruling, issued by the Federal Administrative Court in Leipzig is the final appeal and maintains earlier rulings from lower courts.

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Tags: telefonica  sonera  quam  3g license  Germany