EU undertakes formal review of radio spectrum

In a bid to hasten the arrival of the Internet on mobile phones in Europe, the European Commission is about to change the way telecom companies can use radio frequencies, spokesman Martin Selmayr said Tuesday.

The changes will be discussed in a formal review of existing radio spectrum policy beginning next month, Selmayr said.

If the changes are accepted by the E.U.'s 27 national governments and the European Parliament then mobile phone operators together stand to save between €10 billion (US$12.98 billion) and € 50 billion, by not having to invest in new 3G (third-generation) networks, Selmayr said.

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In a bid to hasten the arrival of the Internet on mobile phones in Europe, the European Commission is about to change the way telecom companies can use radio frequencies, spokesman Martin Selmayr said Tuesday.

The changes will be discussed in a formal review of existing radio spectrum policy beginning next month, Selmayr said.

If the changes are accepted by the E.U.'s 27 national governments and the European Parliament then mobile phone operators together stand to save between €10 billion (US$12.98 billion) and € 50 billion, by not having to invest in new 3G (third-generation) networks, Selmayr said.

Around half of the E.U. is covered by 3G networks, while 2G networks cover the whole E.U.

Under existing radio spectrum rules companies are forbidden from using their 2G networks for anything more than voice telephony and text messaging.

Many mobile phone operators invested billions of euros in buying 3G frequencies, and have invested almost as much in setting up their 3G networks, in order to be able to sell the more lucrative, richer content promised with 3G.

The move is seen as a way of placating Europe's mobile phone industry, after the Commission vowed to clamp down on their habit of overcharging subscribers using their phones abroad. Companies will lose millions of euros in roaming charges once new restrictions are agreed to later this year.

Changes to radio spectrum rules could also be in place later this year, Selmayr said, helping to balance out the lost revenues from roaming charges.

Industry representatives applauded the Commission's move. "It would allow a more efficient use of spectrum," said David Pringle, spokesman for the GSM association.

However, not all companies stand to benefit from the move. Operators without existing 2G networks, including new entrants such as Hutchison Whampoa Ltd., which owns 3, the fifth largest mobile operator in the U.K., have spent heavily buying 3G licenses.

Hutchison Whampoa and 3 were not immediately available to comment.

The IDG News Service is a Network World affiliate.