Czech news agency: cellcos to plough up to CZK40bn into LTE

10 Dec 2013

Czech News Agency (CTK) reports that in the next few years, the country’s mobile network operators may invest up to CZK40 billion (USD1.99 billion) in the rollout of their nationwide 4G Long Term Evolution (LTE) networks. Using data compiled from the three incumbents – T-Mobile CR, Vodafone CR and Telefonica O2 CR – CTK notes that in 2012, they collectively invested around CZK15 billion in their infrastructure and services, with a similar sum expected to be spent this year. With Vodafone’s Marketa Kuklova saying that the company expects to ‘reach the highest investments in relation to revenues in the entire history of the company in the Czech Republic’ next year, T-Mobile CR is also forecasting LTE CAPEX of around CZK13 billion in the next 15 years – with the lion’s share being spent in years one to five. Telefonica O2 CR – currently in the throes of a change of ownership – is more circumspect however, although it has invested over CZK6 billion per annum in recent years. Telefonica chief executive Louis Malvido has said that the carrier will start building its 4G network in the Czech Republic in H1 2014, and plans to invest ‘billions of crowns in LTE networks’ in 2013-2018.

As previously reported by TeleGeography’s CommsUpdate, in November this year national regulator the Czech Telecommunication Office (CTU) confirmed that the country’s three incumbent mobile network operators each secured frequencies allowing them to offer fourth-generation services in the country. However, the tender failed in its primary task of bringing new competition to the market as two would-be newcomers – Revolution Mobile, previously a subsidiary of the financial group PPF, and Sazka Communications (formerly known as Tasciane), which is understood to be controlled by local entrepreneur Karel Komarek’s KKCG Group – failed to take frequencies, despite taking part.

The industry watchdog had seen the auction as the ideal vehicle to bring in much needed competition to a sector long dominated by the three big hitters. In its statement yesterday though, it noted that: ‘Despite the fact the fact that CTU created ideal conditions for a third operator to enter the market, both new interested parties, in the end, decided not to join the Czech mobile market’. TeleGeography notes that in the run-up to the auction, PPF agreed a deal to acquire control of one of the mobile incumbents, Telefonica O2 CR, subject to European Commission (EC) approval.

The CTU confirmed that Telefonica O2 CR and T-Mobile CR each purchased two 800MHz blocks of spectrum, with the former paying CZK2.386 billion for two ‘A2’ blocks, and T-Mobile paying CZK2.231 billion for blocks in ‘A1’ and ‘A2’. Meanwhile, Vodafone CR bought one 800MHz block of ‘A3’ spectrum for CZK2.664 billion, in a tender that yielded a total of CZK8.529 billion for state coffers to support the 2014 budget. Each of the three companies also acquired part of the so-called ‘B2’ block of spectrum in the 1,800MHz band, and four blocks in the 2,600MHz FDD band, the watchdog added.