Oskar award angers Czech rivals

24 Feb 2005

The Czech government has finally sold its third UMTS 3G licence, with the GSM operator Oskar Mobil paying CZK2 billion (USD88 million) for the 20-year concession. Oskar will pay the licence fee in instalments over the next five years and has until the start of 2008 to launch services. However, the award has angered the two country’s existing 3G licensees, Eurotel and T-Mobile, both of which paid CZK3.5 billion for similar concessions in 2001.

Oskar, which then traded under the name Cesky Mobil, refused to bid in the 2001 auction, claiming that the licences were overpriced. The Czech government has been keen to offload the extra concession since then and announced a new sale – at the reduced price – earlier this year, with Oskar given preference if it decided to make an offer this time round.

The licensing process could still run into trouble, with Oskar’s rivals making their feelings known with the authorities. Eurotel’s CEO, Michal Herman, told Total Telecom that his company has already lodged an official complaint with the European Commission (EC) over the “anti-competitive” licence award. The government had earlier defended its pricing strategy, saying the lower price was a reflection of current market conditions and also stating that Eurotel and T-Mobile have had longer to prepare their launches; the pair have until the start of next year to launch a service.

Karla D. Stephens, Oskar’s chief operating officer, commented: “This 3G licence represents an important milestone in our planning for expansion and development. We expect UMTS to be an important platform for offering a new family of data services to our customers, as the market continues to evolve.”

Meanwhile, Oskar has announced its fourth-quarter and full-year results. The company ended 2004 with 1.83 million subscribers, adding almost 285,000 net new customers during the year. The firm now holds around 18% of the Czech mobile market, up from 17% at the end of 2003. Service revenues were up 23.7% to CZK13.4 billion. Operating income before depreciation and amortisation stood at CZK4.1 billion, up from CZK2.9 billion the year before.

Czech Republic, Vodafone Czech Republic