MobilTel wins Bulgaria’s first 3G licence

31 Mar 2005

Bulgaria’s leading wireless operator MobilTel yesterday won the country’s first UMTS licence with a bid of BGL78 million (EUR40.16 million). MobilTel, which operates under the brand name MTel, was bidding against BTC (Mobile), the new cellular arm of dominant fixed line telco the Bulgarian Telecommunications Company (BTC) for the ‘Class A’ 3G concession. The bidding, held at Sofia’s Palace of Culture, opened at BGL70 million and increased in increments of BGL2 million.

The licence (named ‘Class A’ by the regulator, the CRC) is for the frequency ranges 2×10MHz and 1×5MHz, and is the first of three 20-year UMTS licences which the CRC plans to issue by the end of next month. A further auction of two ‘Class B’ 3G concessions (for the frequencies 2×5MHz and 1×5MHz) is scheduled for 5 April, with starting bids set at a lower price of BGL42 million (EUR21.67 million) with bids allowed in BGL1 million increments. BTC and Bulgaria’s second largest cellco, Cosmo Bulgaria (Globul), are expected to bid for the two additional licences.

MobilTel says it plans to start construction of an UMTS network ‘immediately’ and intends to offer commercial 3G services in the country’s five largest cities by the end of 2006 at the latest. Earlier this month it took a step towards third generation technology with the announcement that it was launching EDGE services in the capital, Sofia.

MobilTel is currently under the control of a consortium comprising a group of shareholders in Austria-based Mobiltel Holding (60%) and seven private equity investors (40%) pending the completion of a long drawn-out takeover process. Earlier this month, Telekom Austria paid EUR80 million under a call option agreement to purchase the company. The deal, agreed in December 2004, gave Telekom the unilateral right to acquire 100% of MobilTel for an estimated EUR1.6 million in the second half of this year.

New mobile entrant BTC, meanwhile, is planning to launch a national GSM network in April. In February 2005 BTC completed the acquisition of mobile analogue operator RTC Mobikom and says it is determined to keep Mobikom’s clients, whether they choose to continue using the analogue NMT-450 service or sign up to BTC’s imminent GSM offering. It claims to be implementing its GSM network rollout in such a way as to afford evolution to 3G with minimum effort.

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