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Telefonica Czech CEO ‘really disappointed’ about revised 4G auction plan

12 Apr 2013

Bloomberg reports that the chief executive of Telefonica O2 CR, Luis Malvido, has said he is ‘really disappointed’ with the rules changes put in place by the national regulator for a revamped auction of 4G-suitable spectrum in the country. The CEO told reporters that the new rules are currently being assessed by his firm and it will provide feedback to the Czech Telecommunication Office (CTU) in due course, but that the terms are far from what it expected. ‘We’ve been very surprised and this is damaging our business case with our intention to continue investing,’ he is quoted as saying.

According to TeleGeography’s CommsUpdate, earlier this week the CTU published its new outline plan for the auctioning off of mobile frequencies suitable to support Long Term Evolution (LTE) services, which will hopefully result in the launch of a fourth mobile network operator in the country. The watchdog said at the time: ‘The goal is to support the development of high speed mobile internet networks of the fourth-generation, intensify competition, support the entrance of a new mobile operator and improve the quality of mobile services’. The CTU’s revised auction plan follows the debacle of its cancelled tender last month when bids rose three-fold on the reserve price of CZK7.4 billion (USD373.6 million) to exceed CZK20 billion. As such, the CTU envisages a public consultation period lasting until 8 May. Following this, in June this year it expects to be in a position to announce the deadline for interested parties to submit bids. Further, the regulator now expects bids to be below CZK10 billion. This time, the watchdog aims to put a cap on bids arguing that such high sums as seen in the original auction would hamper operators’ efforts to roll out 4G, leading them to seek to recoup investment costs by imposing higher charges on end users.

Although he declined to provide details, Malvido confirmed that his company is considering ‘further steps’ after the consultancy period on the terms ends in May.

In a separate but related story, yesterday Telefonica O2 CR cut the cost of its mobile voice and data services, which industry watchers say will lead to similar moves by rivals in a sector previously criticised for its lack of competition. In brief, Malvido confirmed that the mobile arm is simplifying its offering, introducing three basic voice and data packages priced from CZK249 to CZK749 per month, and would stop subsidising handsets. The premium package includes unlimited voice calls and SMS and 1GB of data.

Czech Republic, O2 Czech Republic (incl. CETIN)

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