Czech regulator to announce final rules for 4G mobile auction in mid-August.

By bne IntelliNews July 30, 2013

The Czech Telecommunications Office (CTU) will announce the final rules for a planned auction of mobile phone frequencies in mid-August extending the deadline originally set at end-July as it is still waiting for comments by the anti-trust body UOHS and the EC, CTK news agency reported.

CTU chairman Jaromir Novak said that the regulator is holding talks with the EC to make sure that if part of the frequencies is reserved for a newcomer it will not be against EU rules. CTU will auction 800 MHz, 1,800 MHz and 2,600 MHz frequencies for fast mobile networks LTE seeking to raise at least CZK 7bn (EUR 271mn).

Under the auction rules, CTU will allocate two blocks of the 800 MHz band for a new player to compete with the country’s three existing operators - Deutsche Telekom's T-Mobile CR and the local units of Spanish Telefonica and UK's Vodafone. The regulator has earlier said that it will also introduce a new maximum cap for all participants to buy two blocks of the 800MHz band, the backbone for building a country-wide 4G network that enables faster mobile broadband access.

The current market players criticised the auction rules calling them discriminatory but according to CTU the entry of a new company will help boost competitiveness on the market. The possibility of another operator entering the market forced existing operators to slash mobile voice and data prices in April starting a price war that will surely make things difficult for the new entrant.

The regulator cancelled in March the first LTE auction as the received bids exceeded CZK 20bn, which is well above the starting price of CZK 7.4bn, meaning that most likely the costs will be passed on to end-customers through higher charges for Internet services. The companies that applied to participate in the first auction were the country's three mobile companies and PPF Mobile Services, a unit of Czech investment and financial group PPF. All of them are expected to bid in the new auction.

CTU said that companies willing to take part in the new auction will file bids in mid-September and the bidding for individual frequencies is to start at around end-October.

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