KPN confirms it will take part in mobile frequency auction

27 Jan 2010

Dutch telecoms group KPN has revealed it will enter Germany’s digital frequency auction scheduled for 21 April 2010, Reuters reports. The company’s chief executive Ad Scheepbouwer said that KPN would likely bid for 800MHz frequencies for its local unit E-Plus, and may buy mobile clients from The Phone House to cement its base in the German market. Without giving further details, the Dutch firm said it will be cautious in the auction and has set itself a maximum bid price. ‘It is no use in getting the licences at all costs,’ CFO Carla Smits-Nusteling commented, adding that KPN’s plans for a EUR1 billion (USD1.4 billion) share buyback was a sign that for the company ‘it is business as usual and by no means will we go crazy on the auction.’ Meanwhile, KPN’s mobile international executive, Eelco Blok, told analysts that although parties are not allowed to submit offers jointly, KPN will be open to partnerships after the frequencies are obtained, without naming any potential partner. KPN is also looking into purchasing mobile customers from The Phone House, owned by a joint venture between Britain’s Carphone Warehouse and US-based Best Buy Co Inc. However, the company will only buy clients that are already on the E-Plus network.

According to TeleGeography’s GlobalComms Database, the mobile auction involves licences for spectrum freed up in the switchover from analogue to digital television and represents Germany’s largest spectrum auction since the allocation of UMTS concessions in 2000. A spectrum package of 360MHz is set for sale, including spectrum in the 1.7GHz, 1.8GHz, 2GHz and 2.6GHz ranges, as well as 60MHz in the digital dividend range of 800MHz. Last week the Federal Network Agency (FNA) announced that it had received six requests to take part, but did not reveal who the parties are. The government hopes the auction will help close the digital divide in Germany by speeding up the rollout of broadband internet and increase coverage in rural areas.

Germany, E-Plus Group, KPN