Moves to dampen speculation over who was winning the battle to secure the lion’s share of Orange’s reported EUR1billion 3G contracts may have resulted in a public outbreak of peace, but did little to suggest who the real winners within the winners will be.
Following reports trumpeting that Nortel and Alcatel had secured lucrative contracts, all sides in the negotiations, including Nokia, were moved to produce statements regarding the current situation.
But, like a loud piece of music, it was the silences that spoke the most.
The operator itself was forced to confirm that it had indeed entered into agreements with the three equipment vendors for providing 3G radio access network equipment across its proposed 3G network. But it also made clear that these agreements were “framework” agreements only, and were “non-binding.”
Indeed, the operator made clear that the agreements “contain no commitment at this stage, have to be finalised, with terms, amounts and conditions to be negotiated in the coming months”.
The operator also felt moved to restate its 3G roll out plans at the same time, saying it would begin full commercial trials in the UK later this year, with commercial launch expected around mid-2004. This would see Orange UK offer 3G population coverage of over 40% in ten major cities, the major rail routes and airports. By the end of 2004, Orange said it would have 3G coverage in the ten major cities across France.
On the suppliers side, a terse statement from Nokia was perhaps most non-committal. “Nokia continues as global 3G supplier to Orange,” the statement said. “The two companies sign renewed contracts for the rollout of Orange 3G networks in France and the UK. The agreement reaffirms the two companies’ ten-year relationship. Orange chose Nokia after a thorough re-evaluation of its previous supply agreements in 3G. As part of this agreement extension, Nokia has signed renewed contracts with Orange affiliates in France and the UK for the supply of its 3G radio network.”
Nortel at least acknowledged the presence of the two other players in the process, albeit without going so far as to name them, and also made clear the “framework” nature of the agreement, with deployment schedules, market allocations and volume levels “still to be determined by Orange.”
For its part Alcatel too confirmed its selection. It said it expected to carry out “significant” 3G/UMTS deployments in France and said it will also become a supplier of Orange in the UK.
l France Telecom has announced its intention to raise EUR6-7 billion to buy out the remaining 14% share in Orange it does not own. France Telecom said the move would give it access to the mobile operator’s cash-flow.