3G : EC to allow mobile carriers to cooperate on 3G

The European Commission has agreed in principle to permit mobile phone operators mm02 PLC and T-Mobile International AG to pool their resources to develop third generation infrastructure in Germany. A similar decision concerning the U.K. will follow within a month, said a spokeswoman.

Deutsche Telekom AG’s T-Mobile and U.K.-based mm02, a former mobile phone division of British Telecom PLC, last month notified the European Union competition authority of their plans to cooperate.

The companies believe they can make savings of up to 30 per cent through the cost-sharing plans, which include joining forces to build base stations and antennas suited to the high-speed requirements needed for the new mobile technology.

“The Commission concluded after looking closely at the proposed cost-sharing initiative that it would not be anticompetitive and would benefit consumers, as it will hasten the roll-out of 3G services,” said Amelia Torres, spokeswoman on competition issues.

The Commission remains undecided on whether or not to allow the two companies to share radio frequencies, however. “We are still looking at this,” Torres said.

In spring of this year a rift emerged between two of the European Commission’s top officials over how to deal with the mobile phone sector which languishes in a prolonged slump.

The European Commissioner for the information society, Erkki Liikaanen, wanted to grant the struggling firms some immunity from the tough competition rules, but his colleague Mario Monti, in charge of competition, insisted that the rules must apply “during economic downturns as well as during boom times.”

Monti’s spokeswoman said his position remains unchanged and denied that the commissioner has changed his tune. “Mr. Monti was not opposed to such partnerships. He said he would look closely at such plans because of the relatively few number of players in the mobile phone market, and that is what he has done,” Torres said.

The European Commission will probably make a final decision on the cost-sharing plans of mm02 and T-Mobile in Germany and the U.K. next month, after it has received comments on the plans from rival mobile phone operators in the two countries.