The Czech telecommunications office (CTU) has suspended its planned 4G spectrum auction, saying received bids are so high they would have negative economic effects on the industry and consumers.
The regulator had received bids totalling more than Kc20bn…
The Czech telecommunications office (CTU) has suspended its planned 4G spectrum auction, saying received bids are so high they would have negative economic effects on the industry and consumers.
The regulator had received bids totalling more than Kc20bn (US$1.03bn). Announcing the news today, CTU chairman Pavel Dvorak reiterated that the main aim of the auction is not to generate profit, but rather to develop fast 4G networks and make room for a potential fourth mobile operator.
CTU said bids topping more than Kc20bn make the spectrum auction unfeasible from an economic standpoint as they would delay the development of 4G networks and lead to unacceptably high prices for consumers.
The regulator launched the auction of frequencies in the 800MHz, 1800MHz and 2600MHz bands in July 2012. In October, it approved bids to participate from the nation’s three mobile operators – Telefonica CR, Vodafone CR and Deutsche Telekom-owned T-Mobile CR – and a potential new market entrant, local financial firm PPF’s mobile services unit. PPF is owned by the Czech Republic’s richest man, Petr Kellner.
Defending its stance today, the CTU pointed to criticisms made by EU Commissioner Neelie Kroes at the recent Mobile World Congress in Barcelona that some member states were treating spectrum auctions as mere fund-raising exercises, rather than considering broader economic and public interest issues.
The office said it has closely studied spectrum auctions in other EU nations, such as the Netherlands, where bids soared to several times their original estimates. It said that while states may derive immediate financial benefits from such auctions, winners often struggle to fund their licences, hampering network development and forcing overly-high prices on consumers.
CTU said it is reviewing the tender process and will communicate developments in due course.
Last year, the office said the government expected to raise “billions” of Czech koruna from the auction and additional funds from annual fees.
