Czech government to award four UMTS licenses

date: 15th February 2001, source by: Total Telecom

The Czech government said on Wednesday it will sell four third-generation (UMTS) mobile phone licences at five billion crowns ($135 million) each, despite warnings from current operators that the price is far too high.

Government spokesman Libor Roucek told a news conference after a regular cabinet meeting that the three existing GSM operators, EuroTel , RadioMobil and Cesky Mobil , will each be offered a licence for a fixed fee of five billion crowns each.

He added a fourth will be auctioned with the minumum bid expected at five billion crowns.

"The government insists on raising at least 20 billion crowns ($533 million) this year from the licence (sale)," he told a news conference.

The auction should take place in June or July, Roucek added, with all licences seen awarded in July or September. All three GSM operators have complained that the five billion crown price tag is too high and will hurt fast-growing telecommunications business.

RadioMobil, for example, said on Monday it sees a price of around one billion crowns ($27 million) as reasonable.

The result of the high UMTS price will put a disproportionate burden on mobile operators and mean a slowdown in the development of mobile telephony compared to developed European countries, it said, echoing the sentiment of the other operators.

The government has been insisting on the high price tag, set when licences in other European cities were fetching astronomical amounts, to shore up its sagging budget deficit.

But recent auctions in France and neighbouring Poland have shown that leading telecoms companies, which just a few months ago were prepared to spend vast amounts of money on UMTS licences, are now averse to the idea of financing uncertain telecoms projects.

Analysts say around $95 million per licence is more realistic.

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