PPF confirms interest in 4G auction; regulator alters licensing terms

20 Aug 2013

Czech investment group PPF, headed by Petr Kellner, has confirmed its interest in bidding in the upcoming 4G mobile licence auction in Slovakia, which is set to take place by the end of this year. As reported by Slovak newspaper eTrend, the group’s subsidiary PPF Mobile Services (PPFMS) made clear its intention to become the country’s fourth mobile operator in its published contribution to a public consultation on the auction held by the Slovak telecoms regulator, in which it stated: ‘PPFMS considers the upcoming auction of frequencies and the associated onset of 4G LTE technology as very attractive in the medium to long term, probably the only real opportunity to enter the market.’ In the consultation PPFMS also argued that new entrants should be allowed favourable terms in the licence auction, but the Telecommunications Office of the Slovak Republic (TU SR) did not agree, in the interests of a level playing field and preventing any restriction of the existing operators’ mobile broadband network development plans. PPFMS is also aiming to achieve economies of scale by gaining a 4G licence in the neighbouring Czech Republic.

Also taking part in the TU SR’s consultation alongside existing cellcos Slovak Telekom, Orange and O2 were other prospective new entrants – DVB-T transmission network operator Towercom, cable TV/internet provider Satro and broadband operator SWAN. Towercom described itself in its consultation submissions as ‘a serious candidate to enter the market of mobile services’, while according to eTrend the TV broadcasting infrastructure provider’s approach to the auction so far has suggested it is considering a wholesale mobile services operating model. Regarding SWAN, the paper gave the opinion that the frequency block starting price ‘is considered too high’ for the local broadband provider, while the article also implied that Satro’s motivation in the consultation process was ‘primarily to protect its business MMDS wireless services’, which operate in the 2.6GHz frequency band – a range it is being forced to vacate for 4G mobile services, with a transition date of 31 December 2014 set by the regulator. eTrend added that further interest in the auction from a prospective US-based bidder, VelaTel (active in eastern European wireless broadband markets), appeared to have ‘cooled’, as it did not take part in the consultation, while neither did Vietnamese group Viettel – which had expressed interest in obtaining an LTE licence in Slovakia in August 2011, an ambition that it reiterated in March 2012, according to TeleGeography.

As a result of the public consultation, the TU SR has altered some of the terms of the upcoming 4G licence auction, including the compulsory terms of national network roaming to be provided by licensees. Having previously proposed that an existing 2G network operator should offer national roaming facilities to a new entrant for ten years, the regulator cut this time period roughly in half, deciding that roaming provision was compulsory until 31 December 2018, by which date a new 4G licence winner is expected to cover 50% of the population with its own network. Additionally, previously proposed commitments for providing certain regulated wholesale services have been removed from the licensing terms; consequently, wholesale terms with prospective 4G mobile virtual network operators (MVNOs) will be negotiated on a purely commercial basis without regulatory intervention. Under the current auction terms, the sale of 4G frequencies is expected to raise at least EUR142 million (USD189 million).