CTU confirms four bidders in 4G mobile frequency auction

12 Sep 2012

National telecoms regulator the Czech Telecommunication Office (CTU) has received four bids for its upcoming auction of mobile frequencies suitable for 4G Long Term Evolution (LTE) technologies. The companies to have submitted applications include the three incumbents – T-Mobile Czech Republic, Telefonica O2 CR and Vodafone Czech Republic – and a possible new market entrant, local financial firm PPF Group’s subsidiary PPF Mobile Services.

The CTU is confident that the auction will generate ‘billions of crowns’ for state coffers, as well as from the ongoing annual fees licensees will be required to pay for using the frequencies. The watchdog says that by 10 October it will have assessed whether or not the bids received comply with the tender requirements, and that it should complete the auction for allocations of spectrum by the end of this year. A final decision is expected to be announced at the start of 2013, once the CTU is in receipt of the monies from the successful bidders.

The watchdog will auction off spectrum in three frequency bands – 800MHz, 1800MHz and 2600MHz – with the lowest band considered key to developing widespread high speed broadband mobile internet coverage across the country. The reserve price for this band has been set at CZK1.1 billion (USD54.89 million) for the six blocks on offer but, partly in response to comments from industry players, it is understood the CTU believes that an extension in national roaming conditions would be the best way for a newcomer to get off the ground without prohibitive start-up costs. The regulator also now intends to cut the cost of new frequencies in the 1800MHz band by 20% to attract a newcomer, with the PPF Group (controlled by billionaire Petr Kell) considered the only viable contender to establish a venture to challenge the big three incumbents at this time. However, analysts remain to be convinced that that Czech mobile market is big enough and lucrative enough to support a new entrant.

In June this year TeleGeography’s CommsUpdate reported local press as saying that the CTU had appeared to distance itself from an earlier plan to auction off frequencies in the 800MHz band. However, its statement this week confirms that the sale of 800MHz band frequencies is on the table.