Warsaw threat over 3G terms

date: 02 November 2000

Poland's three mobile phone operators are threatening legal action against the government if it does not amend terms of the upcoming third-generation phone tender. The heads of Polkomtel, PTK Centertel and Polska Telefonia Cyfrowa said a requirement that they provide 3G newcomers domestic roaming on their second-generation networks violates Polish law.

The companies also said a requirement that they write the Treasury a blank promissory note prior to the sale is illegal, and said they may sue the government if it does not abandon the provisions. The legal threat casts another shadow over the hurriedly arranged sale, from which the government is expecting to raise at least 7bn zlotys ($1.5bn) next year. The incumbents' vocal discontent with the Communications Ministry's terms have transformed the tender into a noisy public negotiation conducted largely through the media and now, apparently, legal teams.

None of the three companies has yet committed to enter bids by the November 10 deadline. Were they to boycott the sale, they could in theory sabotage it as the costs to new entrants of building a network would rise sharply. "If we don't put in our applications, this tender will become history," said Wladyslaw Bartoszewicz, chief executive of Polkomtel.

Under pressure from the companies, the ministry earlier this month lowered the licence fee from E750m ($628m) to E650m and extended the concession period from 15 to 20 years. The companies still want the number of licences cut from five to four, and are pushing the ministry hard on the roaming provision, which they say will allow new entrants to use their billion-dollar networks at minimal expense. In acceptance of the issue, the tender requires newcomers to build networks covering at least 30 per cent of Poland's population. But incumbents say the condition can be easily met, and want to negotiate roaming terms bilaterally.

top