Communications Ministry publishes 3G tender

The Communications Ministry today officially opens the tender for four 2G/3G mobile licenses, with the minimum bid set at $100 million, and said it would help strapped operators find ways to finance the rollout of advanced cellular networks.

All four cellular operators - Cellcom, Pelephone, Partner, and Mirs - are expected to bid for the licenses, which will eventually allow them to launch advanced mobile networks that will transmit graphics, video, and high-speed data.

Communications Minister Reuven Rivlin announced last week that, despite grievances over the license conditions that have been voiced by Partner and Pelephone, he was going ahead with the tender's original schedule.

Pelephone had said that the tender for 3G frequencies should be postponed for at least two years, when the technology necessary to run the networks would be more transparent. Partner had asked that the payment schedule be changed from 45 days of winning the tender to one based on installments, especially given that the frequencies themselves will be granted only over a period of up to five years.

It is not only the investment in the frequencies that concerns the operators, but the costly installment of 3G networks that will offer payback, in the best case scenario, after only three to five years.

Rivlin said yesterday that he understands the plight of the cellular operators and would do his best to help them find ways to finance the rollout of their advanced networks.

Noting that the operators' concerns are justifiably based on the difficulty of finding funding during the current global telecom crisis, Rivlin said he was convinced that the tender committee would consider easing the financial burden so that operators would be able to both bid for the frequencies and still have money to install their networks.

Potential bidders must buy the candidacy documents at the ministry with a bank guarantee of NIS 50,000 and bids must be in by July 17, when a second bank guarantee of NIS 100,000 must be presented.

The next stage of the tender will be held as an auction in multiple, simultaneous rounds that will continue as long as one bidder ups the ante.