Vladimír Urbánek (Kurzy.cz)
Markets  |  March 08, 2013 15:16:00

CTO surprised and decided to stop the auction of frequencies for 4G - offers are already too high


Czech Telecommunication Office today very surprisingly announced the cancellation of the auction of frequencies for new 4G network. Also surprising is the rationale on which the CTO stated that the price offered now three times higher than the starting 7.4 billion continues to grow, which in the end led to unrealistic economic feasibility of the project surface and affordable deployment of new networks. The high cost would likely negatively reflected in the price level of new services, which goes completely against the original intention CTO below following overprint TZ CTO.

Fear of too high prices offered přirom frequencies were among one of the most risk factors for the development of economic operators, including various publicly traded TO2. Among other things, for this reason the price dropped the title from last year's levels around 400 CZK to current levels slightly above 300 CZK.Shares TO2 respond to the report of growth towards 330 CZK.



TZ CTO:

Czech Telecommunication Office today in accordance with § 21 paragraph 6 of the Law on Electronic Communications canceled the tender (auction) on free radio frequencies to provide public communications networks in the 800 MHz, 1800 MHz and 2600 MHz. CTO decided so because the total supply current for the auctioned frequencies exceeded the limit of twenty billion and still growing

"Before publication of the conditions in the first half of last year, we pointed out that the main motivation for organizing the auction is quick availability of 4G networks for Czech citizens and a possible fourth entry operator. Not profit the state, "says CTO chairman Pavel Dvorak.

The current bid is, according to all models of the feasibility of economically unrealistic. In its effect would have at this point has led to a dramatic and extensive high price for the new fourth generation telecommunication services and essential time delay when placing next-generation networks in commercial operation. "Moreover, such high frequencies auctioned price would have reflected negatively in the form of exorbitant rates of high-speed mobile Internet. We therefore consider it necessary to intervene and prevent future negative consequences for consumers, "explains Pavel Dvorak.

CTO prepared tender conditions according to standard parameters similar auctions implemented within the EU at the time of the auction and also in accordance with the recommendationsreputable consulting firm Grant Thornton. To cancel now, are based on systematic monitoring of auction and continuous evaluation of the actual experiences of those EU Member States where the auction has taken place. For example, in the Netherlands, the auction also stretched and prices soared to several times the original estimate. These auction results but due to its consequences and sharply criticizes EU Commissioner Neelie Kroes. At the recent Congress in Barcelona, ??said that instead of some EU Member States concern for the public interest and investment in networks, see auctions as a source of income.

The participants of such auctions have very often problems with financing obtained licenses, which significantly affects the subsequent investment in network development and affordability of its own services to end users. "In layman's perspective, it may seem that it would actually be good for new operators to pay the highest rate amount. Unfortunately, the reality is that under these conditions, none of the new holders of the frequencies was not able to properly deploy new technology, "to quote Paul Dvorak. "It is necessary to note that while the state would earn, but ultimately paid the price to the end customer."

Czech Telecommunication Office is legally responsible for the supervision and regulation of markets in the electronic communications and postal services. He has a duty to regulate the market in order to ensure that the conditions of fair competition and protect the interests of end users. As part of its mandate, shall, within the limits of the law to promote efficient investment in telecommunications infrastructure, with which the status of the ongoing auction conflicted. At present, therefore, ongoing review of the tendering. Further steps will keep the CTO.

The tender was launched on 12 July 2012 and made up of Vodafone Czech Republic as, T-Mobile Czech Republic as, Telefónica Czech Republic, asPPF and Mobile Services as

PhDr. František Malina
Spokesperson
Czech Telecommunication Office





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