EU approves Oskar’s Czech 3G licence award; rules it did not constitute illegal state aid

22 Dec 2006

The European Commission (EC) has ruled that the Czech Republic’s procedure for awarding 3G mobile network operator licences did not constitute ‘illegal state aid’, writes AFX news. In 2005 the Czech government issued the third 3G concession to Oskar, now a wholly owned unit of the UK’s Vodafone Group, at a significantly lower price than the two previous licences. However, the EC considers that the difference in cost reflected the ‘spectacular’ drop in prices in the 3G market, rather than ‘discrimination’ against the two other operators. Rival cellcos Eurotel Prague (now known as Telefónica O2 CR) and T-Mobile Czech paid EUR105 million (USD93 million) and EUR115 million respectively for their licences in 2001, while Oskar paid EUR66 million for its licence four years later. The Commission’s study found that the Czech authorities applied the same procedures in 2005 though, and the lower price reflected the fall in revenue across the market.