Plans for rolling out next generation mobile phone networks in Europe have been dealt a fresh blow with news that start-up of the services in Sweden is likely to be late.

Sweden had been expected to be among the first European countries to offer the new services, after opting for a model of cheap licences in return for tough commitments from operators on roll-out speed and coverage.

Sweden's 3G licence holders

Vodafone Orange Tele2 Hi3G Access

But those plans have been thrown into doubt after the telecoms authority said Orange, one of the four licence holders, had asked for a three-year delay to the schedule.

News of the request comes days after Spanish telecoms giant Telefonica pulled the plug on its non-Spanish third-generation (3G) telecoms spending.

Many other European operators have also been forced to reassess 3G plans in light of the big debts they built up acquiring licences and the subsequent collapse in their share prices.

Victim

Sweden departed from the script followed by the UK, Germany and others, charging only a nominal licence fee in the hope of encouraging faster and wider network development and lower customer charges.

The country planned for 99.98% of its inhabitants to have 3G access by the end of 2003.

They also want to reduce the coverage

Swedish telecoms authority

But analysts said the country now appeared to have fallen victim to a Europe-wide scaling back in 3G spending.

Orange, a subsidiary of France Telecom, has already announced its intention to restrain capital spending at its German venture MobilCom.

Wider implications

PTS, the Swedish telecoms authority, said Orange had sent it a request that implied a postponement of 3G network completion until 31 December 2006 - three years after the date earlier envisaged.

"They also want to reduce the coverage somewhat, to 8.3 million [people] from 8.86 million," said Hans Brandstrom, PTS's head of mobile telecoms.

Orange is the only one of Sweden's prospective 3G operators known to have requested a delay.

But the move might have wider implications as the company's construction of rural infrastructure is being carried out in joint venture with rivals Vodafone Sweden and Hi3G Access.

Each company is making its own plans for urban infrastructure.

Sweden's fourth licence holder is Tele2, a venture involving local firms NetCom and Telia.

Hi3G Access is a venture of Hong Kong-based Hutchison Whampoa and Investor, the holding company of Sweden's prominent Wallenberg family.