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NTL eyes cellular license?
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October 21, 1999: 6:28 a.m. ET
France Telecom may use NTL investment to complete European cellular coverage
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LONDON (CNNfn) - France Telecom plans to use cable group NTL to bid for one of the five next-generation cellular licenses being auctioned by the British government next year, analysts and a press report said Thursday.
A successful bid would give it access to Europe's four largest cellular markets, though analysts warned that it faced stiff competition for the license, which is expected to cost up to 400 million pounds ($664 million).
France Telecom Chairman Michel Bon identified NTL as its preferred bidding vehicle after earlier expressing plans to bid in its own right, according to a report in the Financial Times.
The company, which paid $6.5 billion for a 25 percent stake in NTL in July, declined to comment further. NTL maintained that while "mobile is definitely part of our future", a third-generation license - in its own right or with its French partner --- was just one option under consideration.
Four of the five licenses up for grabs are thought likely to go to the four existing license holders - BT Cellnet, Vodafone AirTouch (VOD), Deutsche Telekom's (FDTE) One2One unit and Orange, which Germany's Mannesmann (FMMW) agreed to acquire Thursday in a deal worth $36 billion including assumption of debt.
While the convergence of fixed and mobile telephone service puts NTL, the country's largest cable operator, in a good position to win the license, analysts said cash would still dictate the winner. "This is not a beauty contest," said Justine Hayes, cellular analyst at the Yankee Group, a telecom consultant.
The British government delayed the planned auction from the summer until the start of next year after a series of legal difficulties.
More than a dozen new entrants have expressed interest in bidding for the fifth license, including Richard Branson's Virgin Group and telecom network player Energis (EGS).
Content providers including Reuters (RTR), United News & Media (UNWS) and satellite TV group BSkyB (BSB) are also in the running together with supermarket group Tesco (TSCO).
Hayes said the government will also examine market coverage, competition and innovative applications in reaching its decision. Britain's treasury aims to raise up to 2 billion pounds from the five licenses.
Hayes noted that Virgin, which has a strong brand and cellular experience from reselling One2One capacity, was also in a strong position.
New cellular phones are expected to be able to handle more data, with options such as e-mail and Internet access.
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France Telecom
NTL
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