Vol. 4 No.3  

Mobile operators livid over entry terms for new competitor

A new mobile operator should appear by the end of 2008, but existing operators are criticising the price for the license, which is up to 50 times less than costs in the past
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Romania is destined to have a new mobile phone operator by the end of this summer, but the terms of awarding the new license have been accused of being anti-competitive.
“We want another mobile operator who can help Romania increase the usage of mobile telecom services especially in the countryside, by providing services at low prices,” says Minister of IT&C Karoly Borbely.
Up for sale is the 410-415, 420-425 MHz frequency, for mobile voice and data, which is suitable for CDMA technology.
But the Government is planning to sell this license for only one million Euro. This compares to the auctions for GSM, which Dialog (later bought by Orange) and Connex (later bought by Vodafone) purchased in 1996 at 50 million USD and the 44.4 million Euro price tags for the two most recent 3G licenses sold to Zapp and RCS&RDS. Existing operators Vodafone, Orange and Zapp-owners Telemobil all believe the prices should be aligned to previous licenses.
“Why there is such a huge discrepancy between the cost of the 3G license and the cost of this license doesn’t seem to make a lot of sense,” says CEO of Orange Romania Richard Moat.
The authorities argue that this license is not as substantial as the spectrum for 3G, but existing operators are shocked at the massive reduction.
“When a regulator fixes a price significantly below what was sold before and the restricts who can bid for it, this is completely unfair,” says CEO of Zapp Romania Chris Bataillard. “Either a regulator gives frequencies away or auctions them at a similar rate. They cannot be different from one year to another.”
The Diplomat asked the European Commissioner for Information Society and Media, Viviane Reding, if she believed the auction of the license could be accused of being anti-competitive. “It is for a member state and not for the European Commission to decide the way the frequencies are going to be handled,” she said. “Prices should be brought down so that more competition can come into the market.”

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