US : To maximise the 3G business case, Jean-Pierre Bienaimé ( inset ) , chairman of the UMTS Forum, is appealing to regulators and governments to take a pragmatic look at their licensing arrangements. “It’s best that [3G] operators pay a small percentage of their revenue rather than an enormous entry ticket fee,” he says. “And to extend the duration of the licence fee [from 15 years to 20 years] is a very wise move. It’s not realistic to ask operators to have near-nationwide [UMTS] coverage in a short space of time.”

Bienaimé’s words may come as scant consolation to operators in Europe who have already shelled out more than US$100 bn on 3G spectrum, but he is encouraged by the ‘ongoing dialogue’ that is now taking place between regulators and mobile players. “I don’t want to sound as if I am biased, but the flexibility shown by the French regulator [Bienaimé himself hails from France] is a good model to follow.”

After complaints by France’s 3G licence holders surrounding the high licence fee payment structure (licences went for €4.95 bn each to Orange and SFR), ART, the country’s regulator, subsequently changed the terms of the licence to a comparatively nominal upfront cost of €620 m, plus one per cent of turnover for the duration of licence (itself extended from 15 to 20 years).

“We also believe that the process of site acquisition [for base stations] should be simplified and that network sharing, on the UTRAN [UMTS Terrestrial Radio Network] level, should be allowed as a way to reduce costs,” says Bienaimé. “The joint venture between TeliaSonera and Tele2 in Sweden, for example, has reduced network costs by 40 per cent.”

The UMTS Forum has also shared its views on 3G regulation with two key markets yet to award their next-generation mobile licences -- India and China. And last month, Bienaimé was in China lobbying hard for licences based on WCDMA technology [the UMTS version of 3G, which evolves from GSM] to be awarded sooner rather than later. “We believe that the economies of scale that GSM has, plus its open standards and automatic international roaming, is a fantastic opportunity for both China and India,” says Bienaimé. “And given the strong tradition in these two countries of developing software, there is the potential of exporting these valuable IPRs [intellectual property rights] around the world through a global distribution network that supports an open platform for the development of applications.”

He also stresses the compatibility of TD-SCDMA – China’s ‘homegrown’ 3G standard based on TDD (time division duplexing) – with WCDMA. “[FDD, frequency division duplexing] WCDMA could be used for nationwide coverage and TD-SCDMA used for high-speed, ‘hot spot’ areas,” he says.

While Bienaimé accepts that the popularity of CDMA-based networks, the main rival to GSM, has grown considerably, he feels that it still can’t match WCDMA’s economies of scale. “There is one simple figure which speaks for itself,” he says. “By the end of this year there will be one billion GSM customers around the world. I think they [the Chinese authorities] understand the benefits of having such a large export market.”