The Romanian Communications Ministry has awarded two third generation (3G) wireless licences to the country’s largest wireless incumbents, Orange Romania and MobiFon. By accepting the licences the pair have agreed to pay USD35 million for the 15 year concessions; USD10.5 million will fall due in March 2005 with the rest payable in five annual increments of USD4.9 million. The winners must also commit to a minimum network coverage of Bucharest and ten other large towns by the end of 2011; the ministry estimates however that these targets will be easily surpassed and that by the end of 2006 3G coverage will be around 25%.
Four licences were originally put on offer by the ministry, but two of the country’s wireless operators – Rom Telecom-backed Cosmorom and Zapp – turned down the opportunity of bidding claiming they were too expensive, leaving the ministry in something of a quandary as to what to do with the remainder.
Orange Romania was the second operator to launch digital services in Romania when it introduced commercial GSM-900 services in 1997 just months after MobiFon. The cellco began providing WAP in January 2001, following this up with the launch of GPRS in August that year. More recently, last month the company launched an EDGE based service. As far back as April 2002 Orange set up a cooperation agreement with Alcatel to develop a 3G pilot network under which Alcatel delivered and installed its complete range of 3G solutions in Bucharest ready for the deployment of the trial; the French vendor is expected to be Orange Romania’s strategic supplier for the rollout of a full-scale 3G network. Meanwhile Telesystem International Wireless-backed MobiFon, which operates under the brand name Connex, is expected to choose Nortel to perform its 3G network rollout, having previously contracted the Candian vendor to provide it with a converged packet voice and data network.