Swedish 3G Carriers Cry Uncle
By Carlo Longino, Tue Jun 29 16:00:00 GMT 2004

The country's operators have jointly asked its telecom regulator to ease some of the stipulation of their 3G licenses.

TeliaSonera, Tele2, 3 and Vodafone have together asked Sweden's National Post and Telecom Agency to let them use a lower signal strength and slow the timetable of coverage requirements. In the beauty contest used to award the country's 3G licenses, the carriers promised to have the entire population covered by the end of 2003, and had earlier asked for an extension, and were denied, spurring Orange to abandon its license and pull out of Sweden.

The carriers say that they can use a signal strength lower than that mandated without reducing the quality of their networks, allowing them to use fewer base stations to build out their networks, requiring fewer permits and causing less health concerns. They're also asking the total-coverage deadline be pushed back to the end of 2007, but say they'll cover 7 million of the country's 8.8 million people by the end of this year and 8 million by the end of 2005.

Carriers made the initial coverage and signal promises in their proposals for the beauty contest -- which awarded them licenses for 100,000 kronor (about $13,000 at current rates) -- so it's understandable that the government wants to enforce them, lest it lose credibility and set a dangerous precedent. But at the same time, forcing carriers to meet deadlines the market can't support will only hurt the market in the long run.

The carriers' reticence to immediately build out their networks in the country's rural north -- where they're sharing resources -- is understandable. The old-school NMT analog system still thrives there, since it operates at such a low frequency (450mHz) and allows for a long distance between base stations, and there's reportedly been some interest in using CDMA2000 in that frequency in the area.

The licenses were awarded during the telecom boom, when perhaps the promises seemed realistic -- or perhaps the companies, under pressure to make strong proposals to win the licenses, fudged a bit. A regulator imposing minimum levels of service isn't unacceptable, either, but it would be better if those levels were based on something less arbitrary than raw signal strength and geographic coverage. In any market, particularly an advanced one with four operators, competition will force carriers to offer the best product they can, at the best possible price, and will in the long and short run, be more effective than overzealous regulation.