Vodafone urges licence change

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The Independent Online
VODAFONE'S chief executive Chris Gent yesterday urged the Government to reconsider its plan to auction five licences with varying bandwidths for the next generation of mobile phone services, due to begin operating around 2001.

"It's a mistake," Mr Gent said. "It's better to have four equal licences. One hopes they will listen to the industry."

In February, the Government postponed the licence auction to early 2000 after delays in agreeing network standards. It also reflected the need to allow the Trade and Industry Secretary, Stephen Byers, to become familiar with the technology of third-generation services after he replaced Peter Mandelson.

The current plan is to auction licences offering different amounts of bandwidth, although Mr Gent, noting that the technical standards are still not fully settled, hopes Government policy may yet be modified. DTI sources said changes to bandwidth allocations may still occur.

Vodafone, assuming it wins a licence, plans to spend up to pounds 1.2bn on developing third-generation services over five years from 2001. The new service, called universal mobile telecoms service, or UMTS, will incorporate Internet applications, allowing document transmission, e-commerce transactions and other information services.

"We are on a progressive path of providing richer and richer services," Mr Gent said. Vodafone is negotiating with several content providers to offer banking, news and transaction services to users.

The remarks came as Vodafone unveiled a higher-than-expected 44 per cent rise in pre-tax profit to pounds 935.2m as turnover jumped 36 per cent to pounds 3.36bn. Its customer base, including its share of customers from operations abroad in which it has an interest, leapt to 10.4 million from 5.8 million.

In Britain, Vodafone connected over 2.1 million net new customers - four times as many as the previous year - for a total of 5.57 million at 31 March. UK turnover rose 17.8 per cent to pounds 1.77bn as strong customer growth and higher use offset the impact of tariff reductions.

Keener UK competition saw Vodafone's number of contract subscribers fall slightly in April and May, but pre-pay customer growth is still strong. Vodafone said the pounds 38bn takeover of AirTouch of the US should be completed by early July. The shares closed up 16p at pounds 12.98.

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