Romania Sells Two Out of Four 3G Licences

November 16, 2004 - source: BWCS

The national telecoms regulator in Romania (the MCTI) has announced the winners of the bidding for 3G licences in the country. However, it has decided only to award two, instead of the four franchises which it had planned to sell. The lucky recipients are: MobiFon and Orange Romania, the country’s two largest mobile operators. According to the Romanian government, these were the only two bids it received.

Each winning bidder will have to pay out US$35 million for the 15 year licences. Under the terms of the licence award the operators must pay US$10.5 million within four months. The rest will be paid in five annual portions of US$4.9 million.

When the government first announced its plans to sell off the licences it put stringent stipulations on the type of companies or consortia it would be willing to accept as bidders. Each would-be licence holder had to demonstrate that it would have sufficient capital to cover network build. In addition, the MCTI said it would only entertain proposals from companies in the field of communications which had a turnover of, at least, euros 300 million.

Besides mere financial muscle, would-be licence holders had to convince the authority that they had sufficient experience and expertise in the field to run a next generation mobile telephone network. According to the MCTI, only the candidates that could convince them on all counts would make it through to the bidding stages. It appears that these stringent conditions have dissuaded other consortia from mounting a bid for the remaining licences.

The first deadline, which is set for December 2005, calls for the licence winners to provide coverage of the Romanian capital, Bucharest, plus ten other urban areas.