Czech regulator sees more potential bidders in 4G auction

Reuters News
Posted: Jul 30, 2013 8:59 AM

PRAGUE (Reuters) - The Czech telecoms regulator has had talks with potential bidders in an auction of mobile spectrum frequencies besides those that took part in an aborted sale in March, the office said on Tuesday.

The Czech Telecommunications Office (CTU) expects to start a new auction of frequencies to build fourth-generation mobile networks, marketed as 4G LTE, by the middle of August.

It plans to move ahead despite protests from the country's three incumbent operators -- Telefonica Czech Republic, T-Mobile and Vodafone -- which have criticized the auction conditions, mainly one reserving frequencies for a new entrant.

Newcomer PPF Mobile Services, a unit of the PPF investment group owned by Petr Kellner, the richest man in the Czech Republic, took part in an aborted auction earlier this year and is also expected to enter the new auction.

But besides PPF, CTU said on Tuesday it believed there could be one or more new entrants bidding in the auction.

CTU spokesman Frantisek Malina said that in May the regulator met with "several potential investors" in London.

"Representatives of mainly institutional investment funds stopped at our offices a week ago during a tour around several CEE countries organized by Citigroup," he said in an emailed response to questions.

He add the investors could "pursue different strategies ranging from investing into greenfield operations to acquiring a stake in one of incumbent operators."

"We strongly believe that with a transparent and nondiscriminatory auction we set up there can be one or more new entrants bidding for the LTE spectrum."

A Citigroup spokesman was unavailable to comment.

Komercni Banka analyst Josef Nemy said it still looked like PPF was the only serious interested new entrant.

"If I had to bet, I would choose there is no other serious interest other than PPF," Nemy said.

CTU has set aside part of the 800 MHz band for a new entrant in a bid to boost competition. The new spectrum will host super fast mobile networks based on fourth-generation technology that will allow faster mobile broadband access.

However, Telefonica CR, a unit of Spain's Telefonica, has threatened to complain to the European Union, saying it would be disadvantaged by the auction conditions.

CTU boss Jaromir Novak was quoted as saying in financial daily Hospodarske Noviny on Tuesday that the office was ready for a legal dispute.

Nemy said any further delays to the auction could harm PPF's interest in it.

(Reporting by Jason Hovet; editing by Keiron Henderson)