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UMTS On Its Way At Deutsche Telekom

Deutsche Telekom plans to launch its UMTS services later this year. But it warns that government regulation is hindering further innovation.

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Germany's UMTS mobile phone users have something to look forward to

German telecommunications giant Deutsche Telekom is in favor of removing excess UMTS licenses from the market and not reselling them. Licenses which companies must return should "disappear into the vault", Deutsche Telekom's chairman of the board Kai-Uwe Ricke told a telecommunications congress in Berlin on Thursday.

Deutsche Telekom was one of the six operators in 2000 to acquire a license to provide the third generation of multi-media mobile phones services, UMTS, in Germany. The companies each paid 8.5 billion euro ($ 9.2 billion) for these rights.

All six holders must offer access to UMTS services to at least 25 percent of the population by the end of 2003 - or their licenses return to the government for free and can be resold.

The huge financial burden resulting from UMTS development has already led two competitors - MobilCom and Quam - to cease developing their UMTS networks.

According to Ricke, these "roaming licenses" would become a problem. As a direct sale from the current license holder to another company is not possible, a complete takeover would be an option, as this would include the UMTS licenses. He did not name any potential investors, though.

Preparing to launch

Ricke said Deutsche Telekom planned to launch commercial UMTS mobile phone services in Germany from the third quarter of the current year. The group will initially offer them in over 200 cities around Germany, he said.

He added that Deutsche Telekom would continue with this technology, despite the high costs and necessary investments for UMTS networks.

Telekom Chef Kai-Uwe Ricke

Kai-Uwe Ricke, new chairman of the board of German telephone company Telekom, poses in front of the company's logo prior to a press conference in the German city of Bonn on Thursday, Nov. 14, 2002. Ricke replaces Ron Sommer who was ousted in July. (AP Photo/Michael Sohn)

"We at Deutsche Telekom, will resolutely pursue our goals and continue to push the development of the information society in Germany, even in these difficult times," said Ricke (photo).

He said he was convinced UMTS would eventually prove successful.

Complete deregulation must be the goal

In order to be able to continue driving innovation in Germany to the full extent, Ricke said it was up to politicians to ensure that they "guaranteed a sound framework, one that companies can rely on and which lets them take responsible entrepreneurial action".

He was referring to the upcoming amendment to the German Telecommunications Act this fall. "The trend must always be towards deregulation and less regulation," Ricke said. "The ultimate goal must be to make regulation superfluous."

The German Economics Minister Wolfgang Clement said at the congress that he shared Ricke's views on amending the Telecommunications Act. It should "encourage competition and innovation" and "balance competition among companies providing infrastructure and those that provide services", Clement said.

New European directives from Brussels require Germany to amend its telecommunications law this summer.

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