Orange Jordan’s 3G bid denied

3G rollout suffers another blow as only bidder rejected

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By  George Bevir Published  June 3, 2009

Orange Jordan, the only company to submit an offer for a 3G licence in Jordan, has had its bid rejected by the country’s telecom regulator.

A spokeswoman for the telecommunications regulatory commission (TRC) said the bid was refused because the operator failed to abide by the rules mentioned within the tender.

Philippe Vogeleer, Orange Jordan’s chief strategy officer expressed his surprise at the decision, which analysts say could be detrimental to the development of the country.

3G services allow for faster download speeds for mobile phones, and allow laptops to connect to the internet providing connectivity in areas that are not served by fixed-line infrastructure.

At the Arab Advisors conference held in Jordan earlier this week, Jordan’s minister of ICT, Bassem Al Rousan, said “increasing internet and PC penetration remains a priority” for the country. Earlier this year, he said that he hoped the 3G licencing process would be completed by the end of April.

The TRC spokeswoman said that Orange Jordan’s bid did not comply with the financial or technical aspects of the process.

“They did not present their financial bond, which is JD10 million,” the spokeswoman said.
Milan Sallaba, partner at analysts Oliver Wyman, said the 3G licensing process in Jordan has been “marred by a string of delays”, and he described the latest delays as “discouraging”.

Sallaba said: “Orange appears to acknowledge that the bond has not been submitted due to process uncertainties over how it may be retrieved if the negotiation should fail. Another issue seems to relate to tax concessions that were requested by Orange which the TRC did not want to, or cannot consider.”

Vogeleer said that as far as Orange Jordan was concerned its bid met “every single condition”, but he said that additional requests relating to tax payments and technical issues were included in Orange Jordan’s proposal.

According to analysts the rejection of Orange Jordan's licence bid could be an attempt by the TRC to revitalise operator interest in an effort to maximise 3G license fees.

The TRC said it remains committed to deploying 3G in Jordan, and commissioners at the regulator are now assessing how to allocate the spectrum.

“It might be offered later on in the same context, or under different conditions,” the spokeswoman said.

Sallaba added: “I am confident that 3G will eventually be rolled out in Jordan but it is a rocky road for all players until operators' cautious business plans and buoyant government expectations over license fee income finally come together.”

Analysts at Strand Consult said the value of selling a mobile licence is minimal compared to the value of a society having a national mobile broadband network, which will enable an increasing number of citizens to connect online, at high speeds and regardless of the customers physical location - at home or on the road, in the city or in the country.

John Strand of Strand Consult said: “We believe that the path forward is an open auction model, where the licenses are sold to operators under certain terms and conditions.

“We believe that [regulators] should encourage operators to work together on building network infrastructure, especially in the thinly populated areas and we believe that one should reward operators that deliver a better coverage than required in the license terms. This can be achieved by using taxation models, or by giving a share of the auction money back to the operators if they do things that benefit society,” he said.

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