The Spanish government has eased the investment conditions for companies holding a licence to develop and eventually operate next-generation mobile phone networks in the country. The Science and Technology Ministry said in a statement that it was reducing financial guarantees required to deploy a network.

The ministry said the four operators - Amena, Telefónica Moviles, Xfera and Vodafone - would now be required to provide guarantees of only €1.31 billion instead of €6.5 billion.

The ministry said the change in requirements was aimed at helping improve "operators' financial ratios in order to facilitate their investment commitments".

Some European countries are having to rethink their policy towards next-generation mobile phone or UMTS networks as many operators are finding it difficult to meet commitments to invest in the networks in the wake of the bursting of the telecommunications bubble.

Universal Mobile Telecommunications System - also known as third generation or 3G - is designed to provide email, high-speed internet surfing and live sound and image broadcasts to compatible handsets.

During the telecom bubble of the late 1990s operators spent heavily on plans to build UMTS networks but are now finding it difficult to keep up the pace since the telecoms industry's phenomenal growth ground to a halt after the bubble burst.

The ministry said the four future UMTS operators in Spain had agreed to increase their UMTS investments next year by 20 per cent to €1.464 billion.

The operators had also stood by promises to have networks offering limited services by the second half of 2003 and to be commercially operating by mid 2004.

- (AFP)