The Czech telecoms regulator has attracted strong criticism from local mobile operators over proposed conditions for its postponed 4G spectrum auction, with some contending they may contravene EU law.
The Czech Telecommunication Office (CTU) announced…
The Czech telecoms regulator has attracted strong criticism from local mobile operators over proposed conditions for its postponed 4G spectrum auction, with some contending they may contravene EU law.
The Czech Telecommunication Office (CTU) announced its official ‘settlement comments’ on proposed conditions for the auction yesterday, following public consultation, saying there would be increased incentives for a new market entrant in an effort to boost competition.
As expected, the office stated spectrum will be reserved for the new entrant: specifically two 10MHz blocks in the 800MHz band. In addition, the new entrant may be able to access national roaming services on existing operators’ 2G and 3G networks.
Spectrum in the 1800MHz and 2600MHz bands will also be auctioned.
The regulator said it is now preparing final draft terms, which it will discuss with the competition authority, and expects to launch the auction by the end of July.
The Czech Republic’s three existing mobile network operators – Telefonica, T-Mobile and Vodafone – have all criticised the proposed auction conditions, which the CTU first outlined in April. The regulator called off the previous auction process in March, saying received bids were so high they would have negative economic effects for the industry and consumers. However, the existing operators have argued that the proposed conditions could give a market entrant an unfair advantage.
The fourth bidder in the auction is widely expected to be the mobile services arm of Czech magnate Petr Kellner’s PPF investment group.
A spokesperson for Telefonica Czech Republic confirmed that the telco may consider lodging an official complaint with the European Commission if the auction conditions remain as they are.
“We do not consider the proposed conditions to be balanced. If the planned policies receive final approval, we will be left with no option but to consider all possible avenues left to us to defend our rights as an organisation. This could include approaching the European Commission with an official complaint outlining our position and views in what we consider to be unlawful and biased support on part of the government and governing bodies,” said the spokesperson.
The company believes that reserving part of the 800MHz band for a new entrant is unjustified, given the suspended auction in March showed that “even with non-discriminative conditions, the auction could attract very strong players”.
Commenting on the proposed auction conditions earlier this month, Vodafone’s director for regulatory and external affairs, Richard Stonavsky, said his company believes the increased incentives for a new entrant are excessive.
“Some of the incentives may constitute illegal state aid and bypassing a regular process for setting regulatory obligations as expected by the EU law,” said Stonavsky.
He said the CTU should finalise its analysis of the mobile market, begun in 2011, before deciding whether the 4G auction should include any incentives for a new entrant.
“Without this analysis, CTU cannot justify the currently proposed reservation of spectrum and national roaming obligations,” he added.
A spokesperson for T-Mobile said the company regards any reservation of “lucrative” frequencies for a new entrant as preferential treatment, adding that this “has the characteristics of state aid”.
T-Mobile will decide on its next steps in connection with the matter when the final auction conditions are knows, the spokesperson said.
“We trust that these conditions will reflect the legislation in force in the Czech Republic and the EU”.
