The French government has effectively cut the price of 3G mobile licenses.

The French government announced on Tuesday that it would change the conditions surrounding 3G mobile licenses. It will cut the upfront cost of a license to E619 million, and will impose a tax on operators’ 3G revenues. This is a major change from the E4.95 billion upfront fee the government originally planned, half of which would have been due in the first two years.

It’s good news for the two operators that bought licenses in January’s beauty contest. SFR (majority owned by Vivendi) and France Telecom’s Orange will make major savings in the first few years, easing their financial pressures. It’s particularly good news for SFR, which withheld payment on its license last month in protest against the cost. Clearly, the government listened.

The decision will boost the French mobile industry by easing the pressure on Vivendi and France Telecom (already one of the world’s most indebted companies), allowing them to spend more on network roll-out. It could also encourage buyers for the two 3G licenses that are so far unsold. The government also announced that it wanted to award the licenses as soon as possible.

France’s third mobile operator, Bouygues, refused to buy a 3G license because of the cost; the company may now change its mind. At the same time, as one of Europe’s largest economies and with a relatively low mobile penetration rate (46%, compared to 58% in the UK and 59% in the Netherlands), France could be an opportunity for a new entrant.

However, some analysts claim that existing 3G licenses are worthless. Although these predictions are likely to prove pessimistic, with broadband mobile data services set to take off eventually, times will be tough for new entrants (with no existing revenues or mindshare) in the short term. Already, Sonera has abandoned its Norwegian 3G license and put its Xfera Portuguese joint venture on hold.

As a result (and given the major mobile operators’ existing debt problems), a bidder for France’s fourth 3G license could prove elusive.