UPC, NRJ And Marine-Wendel Join Forces To Bid For French Local Loop Licence

A consortium of companies led by United Pan-Europe Communications (UPC), Marine-Wendel, Alpha and NRJ has filed an application with the French regulatory authority (Autorité de Régulation des Télécommunications (ART) for a national licence to operate a wireless local loop network. The consortium has also filed 11 other applications for regional licences.

The capital of the applicant company will be owned 47.5% by an investment vehicle controlled by Marine-Wendel, 47.5% by UPC through its pan-European wireless subsidiary Priority Wireless, and 5% by Sogetec, a subsidiary of NRJ.

UPC's involvement in the consortium demonstrates UPC's determination to exploit alternative technologies as a means of distributing UPC's voice and Internet/data services. UPC established Priority Wireless last August as a wholly owned subsidiary dedicated to exploring and building opportunities for UPC's services over these new technologies. Priority Wireless is a separate business unit from Priority Telecom, UPC's CLEC and business telephony subsidiary.

Marine-Wendel is an investment group that invests in a limited number of companies in which it may play an active, entrepreneurial role, as it does, for example, in Cap Gemini, Valéo, AOM, Bio Mérieux Alliance, Alain Afflelou, Trader.com and Bureau Veritas.

UPC owns and operates the second largest cable network in Europe which passes more than 9.2 million homes of which one million are in France (with an additional 800,000 homes yet to be passed). UPC is also, through its chello broadband subsidiary, Europe's first and leading broadband internet service provider with close to 120,000 subscribers as of the end of December 1999, and, through its Priority Telecom subsidiary, is also the largest provider of cable telephony services in Europe. UPC also operates the largest pan-European broadband backbone AORTA. In 1998, UPC obtained in Norway one of the first wireless local loop licences to be awarded in Europe.
NRJ, via its wholly owned subsidiary Sogetec, owns and operates the second largest network of wireless communication towers after Télédiffusion de France (TDF). Sogetec's network offers the consortium a rapid initial deployment over a very large part of France. Sogetec also brings to the consortium its experience in the management of frequency spectra.

The consortium is prepared to invest more than FRF 17 billion in order to cover more than 200 urban areas in France with a network that would create a true competitor in local loop telecommunications. This network targets both residential and businesses customers, with data transmission services, broadband Internet access and broadband telephony. This project would create more than 10,000 jobs, directly or indirectly, in France.

Earnest-Antoine Seillière, President of Marine-Wendel, stated: "to permit such true competition in local loop telecommunications is a major economic step. I am delighted that Marine-Wendel is able to associate itself with a strongly performing European telecommunications group to face this challenge and create a new French telecommunications operator, backed by a stable ownership structure and in which the key decisions will be made in France.

Mark Schneider, President of UPC stated: "Our group has already invested more than FRF 3 billion in France and contributes to the employment of some 2000 people. I am very happy that we are growing, in long-term partnership with Marine-Wendel and NRJ, to use our strengths in broadband Internet access, in data transmission and in telephony to promote real competition in the French local loop market.

Jean-Paul Baudecroux, Chief Executive Officer of NRJ, said: "This wireless local loop project represents a terrific opportunity to develop high-speed Internet access in France. The participation of NRJ alongside Marine-Wendel and UPC strengthens the French roots of the project and allows Sogetec to realise its mission of becoming an operator of wireless local loop infrastructure to rival TDF, a subsidiary of France Télécom. This transaction represents a significant opportunity for NRJ to expand its business through the possibilities offered by broadband internet, such as the downloading of music and video."