Czech 4G tender attracts five bids, but PPF Group abstains

1 Oct 2013

National telecoms regulator the Czech Telecommunication Office (CTU) has reported that the country’s three incumbents – Telefonica O2 CR, T-Mobile CR and Vodafone CR – each submitted applications to bid in the upcoming auction of 4G mobile frequencies by yesterday’s deadline. Further, the watchdog reported that the ‘big three’ were joined by two new potential market entrants: Revolution Mobile AS, a former unit of Czech financial group PPF; and unknown quantity, Czech-owned Tasciane AS. To the surprise of some industry watchers though, PPF Group, the Czech financial company controlled by billionaire Petr Kellner, opted not to participate on the grounds that the tender prevents a new entrant from merging with ‘another participant’ for at least 15 years. Bloomberg notes that in the run-up to the deadline, PPF Group sold its PPF Mobile Services unit to its CEO Tomas Budnik, which then changed its name to Revolution Mobile, and submitted an application. PPF spokesman Radek Stavel said: ‘Because the telecommunications market will change dramatically as a result of revolutionary shifts in technology, this type of 15-year obligation is not practically or economically sensible.’

The revised auction of Long Term Evolution (LTE) licences is expected to raise up to CZK8.72 billion (USD457 million) for the government, which is striving to boost competition and services in the local market. The first attempt to allocate 4G licences was called off in March this year after the reserve price climbed so high it was feared that it would risk inflating the price of the services and delaying launch. The terms and conditions of the revamped tender also mandates reserving a spectrum block in the 800MHz and 1800MHz bands for a new entrant to help boost competitiveness in the market. The 4G mobile frequencies auction faces challenges against some of the conditions set out by the CTU, including the stipulation to reserve frequencies for a new entrant – which has angered the incumbents.

The CTU is expected to begin assessing the applications today and the electronic auction process for frequencies will kick off on 11 November.