Czech authorities to kick off 4G auction in November

Czech regulatory authorities have announced plans to hold an auction of 4G spectrum by mid-November after a previous sale was suspended over concern about the high prices companies were offering for licenses.

In a statement published on its website, the Czech Telecommunications Office (CTU) said companies would be able to register their interest in bidding for spectrum until 30 September.

The CTU plans to sell frequencies in the 800MHz, 1800MHz and 2.6GHz bands but has stoked controversy by proposing to reserve some of the 800MHz and 1800MHz airwaves for a new entrant.

Czech regulatory authorities have announced plans to hold an auction of 4G spectrum by mid-November after a previous sale was suspended over concern about the high prices companies were offering for licenses.

In a statement published on its website, the Czech Telecommunications Office (CTU) said companies would be able to register their interest in bidding for spectrum until 30 September.

The CTU plans to sell frequencies in the 800MHz, 1800MHz and 2.6GHz bands but has stoked controversy by proposing to reserve some of the 800MHz and 1800MHz airwaves for a new entrant.

The country’s existing operators – Telefonica (Madrid, Spain), T-Mobile (Bonn, Germany) and Vodafone (Newbury, UK) – have complained about the unfairness of this rule, arguing it will reduce the supply of available spectrum and drive up prices, and threatened to pursue legal action against the CTU or even to skip the auction entirely.

Nevertheless, press reports suggest the CTU intends to proceed as originally planned and indicate that EU authorities may already have rejected an appeal made by T-Mobile.

Such a development would not be surprising given that national regulatory authorities in other parts of the EU have already reserved spectrum for new entrants during frequency auctions.

Even so, the rule would probably increase prices – as operators fear – and seems odd in light of the regulator’s purported concern about the escalating cost of spectrum during the March 2013 process, which was ultimately suspended.

Authorities called a halt to proceedings after claiming that high auction fees would reduce the funding available to operators for the deployment of 4G networks.

In the meantime, the country’s existing operators have been running trials of 4G technology using spectrum they already own in the 1800MHz band.

Despite the proposal to reserve spectrum for a new entrant, PPF Group (Amsterdam, Netherlands), an investment group owned by Czech billionaire Petr Kellner, is thought to be the only entity besides the country’s existing operators that is interested in bidding for airwaves.

Indeed, as a relatively small market that is already being fought over by three of Europe’s biggest operators, the Czech Republic may seem a fairly unattractive investment opportunity – especially considering the economic and regulatory challenges the incumbents already face.

The CTU says it plans to award spectrum in early 2014 and that licenses will be valid until 2029.

“The objectives of the auction are clear,” said Jaromir Novak, the chairman of the CTU. “We strive to develop new services … encourage competition, create the conditions for the entry of another operator with nationwide operations and ensure efficient use of spectrum.”