Mr. Alex Chisholm:

The population coverage requirement must be achieved over a number of years. It is important to bear in mind that we are not dealing with an entirely greenfield site here. We have had 17 years of mobile licences and there is a lot of mobile spectrum already being used. Those spectrum provisions are subject to their own rules and regulations as to what level of population coverage must be reached. Under the ordinary voice telephony requirements, for example, the population coverage requirements vary from 80% up to 90% plus. However, in terms of what has actually been achieved, the figures are in the 97% to 99% range. In the case of data services - that is, 3G services - again, there were different requirements, varying between 85% and 90% in different periods of time. When we set new requirements, the existing ones do not fall away instantly as a consequence. In the case of 3G, for instance, the requirements will continue until 2022.

In setting these licence requirements, we had to look at the possibility of an entirely new entrant. We were not setting a competition which was exclusively for the existing players in the market who were already operating with mobile spectrum. We also had to take account of the fact that not all of those operators already had spectrum at this particular level, that is, in the 900 MHz band. Furthermore, we could not specify particular services under the European regime. In other words, we could not specify the provision of 4G but instead had to provide an offering that was technically neutral and could be used for a range of services.

It turns out that it probably will be used for 4G but that is actually up to the firms themselves. With all of those things taken into account, we came up with a 70% level because our primary desire was to ensure that there would not be cherry-picking, with one or perhaps two firms coming in and only providing coverage in the large cities, which we felt might be very destabilising to the overall economics of the industry. That is why we set the 70% level for all licenceholders but in actual fact the levels that will be achieved will be far in excess of that because of ordinary competitive pressures and the requirements under other parts of the legislation.