Swedish telecoms firm Telia has said it will appeal against the decision of the country's telecoms authorities not to grant it a licence to operate third-generation mobile phone services.

The former national telecoms monopoly said it would submit the appeal to a county administrative court on Monday and demanded that the licence tender results be frozen until the appeal had been dealt with.

Most analysts, while surprised by Telia's failure to win a new licence in its own country, doubted that an appeal would succeed.

Telia is Sweden's largest incumbent telecoms operator and has a second-generation network covering more of the population than any of its competitors.

Opposition underestimated

But, in rejecting the company's licence bid, the authorities said the shortcomings of Telia's proposals were "considerable" particularly in terms of geographical coverage.

Officials said Telia would have needed to increase three-fold the number of base stations it planned to build.

Analysts said the tender process had been a transparent one, with the decisions for rejecting candidates clearly stated.

Telia's failure appeared to have been in miscalculating the strength of the opposition.

No more spectrum

In the, albeit unlikely, event of a successful appeal, the Swedish authorities would be placed in a difficult position.

The spectrum has already been divided up among the four licence winners, and no more wavelengths are immediately available.

And any attempt to remove a licence from its new holder and reallocate it to Telia would almost certainly prompt fresh legal challenges.

Analysts were divided over the damage to Telia of being denied a 3G licence.

Some said the company's regional strategy had been left in tatters.

Expensive gamble?

Others said the massive investments needed in infrastructure and marketing were more of an expensive gamble than a surefire moneyspinner.

There is not yet a proven business model for providing 3G services and revenue streams for operators might easily start declining, they said.

The licence setback was the latest of several for Telia, whose plans to merge with Norway's Telenor collapsed last year amid nationalistic bickering.

Telia is also without a permanent chief executive after the departure of Jan-Ake Kark three months ago.

The appeal process is expected to last several months.