UMTS licence:Broad-based consortium challenges telecommunications companies

A consortium headed by Orkla has decided to apply for a licence to establish and operate a third-generation mobile communication system in Norway. Orkla is accompanied in the consortium by Dagbladet, Hafslund, Hakon Gruppen, NorgesGruppen, OBOS/NBBL and Norway Post.

"Services and transmission capacity have traditionally been provided by the same operator. Future mobile applications will offer a wide range of services, requiring more than traditional telecommunications and transmission capability" says Managing Director Tom Vidar Rygh at Orkla.

Orkla, Norway's second biggest group in terms of market capitalisation, will be the main player in the consortium. Other participants will be Hakon Gruppen (5%), NorgesGruppen (5%), Hafslund (5%), Norway Post (5%), OBOS/NBBL (2.5%) and Dagbladet (2.5%). Figures in parenthesis show the respective initial ownership interests in the consortium.

The group comprises financially solid participants who will commit themselves to ensuring a rapid spread of advanced mobile services. The consortium will ensure a pace of development far in excess of the authorities' minimum requirements: In addition to the 12 urban areas where the authorities require minimum coverage, the group intends to develop a further 44 areas within the same time-scale as that set for the 12.

The breadth of competence required of an UMTS licensee is the reason why the group has chosen to form a consortium and apply for a licence.

"Our assessment is that possessing skills in brandbuilding, product development, consumer understanding and contact, is a strong point in this case," says Mr. Rygh.

Orkla already manages a portfolio worth close to NOK 10 billion in the telecommunications, media and Internet sector. The group was also at centre-stage in building up NetCom from the start, so far the only similar project completed in Norway.

The other members of the consortium will each be in a position to provide the project with substantial competitive advantages, such as a broad customer base, locations for base stations throughout the country and media competence (Dagbladet and Orkla Media); all in all a sound basis for developing forward-looking services for the customer.

"We believe that the consortium has the industrial and financial competence and the ability to get the job done that are required of a UMTS licensee. We represent a differentiated alternative to the other players, which will enable us to encourage diversity and competition in keeping with the authorities' intentions," says Mr. Rygh.