State could cash in EUR 700mln from telecom license bidding. What spectrum is up for grabs and the proposed starting prices

What spectrum is up for grabs and the proposed starting prices?

If all the blocks of spectrum taken out for bidding are sold, the state could register revenues of EUR 700 million from the bidding of the telecom licenses, according to Catalin Marinescu, president of telecom regulator ANCOM, during a press conference today.

On March 14, the documents of the bidding will be published for public consultation on the website of the telecom authority and observations will be received by April 17, 2012. After that, there will be a term of 1-2 weeks when the observations received from the industry will be discussed and the documentation will be modified accordingly.

The final version of the bidding documents will be published on May 1, 2012.

What spectrum is up for grabs?

Out for sale during the bidding will be 42 duplex blocks of 5 MHz each, of which 6 blocks are in 800 MHz, 7 blocks are in the 900 MHz, 15 blocks in the 1800 MHz and 14 blocks in the 2,600 MHz. On top of this, there will be taken out for bidding 3 simplex blocks of 15 MHz each in the bandwidth of 2,600 MHz.

For all these licenses above, the usage rights will be granted for a 15 year time-span, starting with April 6, 2014.

There will also be short-term 15-month usage rights, which expire on April 5, 2014, in the case of licenses for spectrum in the bandwidth of 900 MHz, 1,800 MHz that are currently being used by Orange and Vodafone. This spectrum is represented by 5 duplex blocks in 900 MHz and 6 duplex blocks in the bandwidth of 1,800 MHz.

The introduction of the short-term licenses is the way in which ANCOM ensures that all the frequencies listed above will become available at the same time and the 15-year-usage rights will be granted in correct conditions both to current players or potential newcomers on the market.

Starting prices proposed by the telecom authority

The starting prices for the blocks of spectrum to be sold in the bidding were proposed by ANCOM but will be decided by the government and approved via a government decision.

The proposals of the telecom authority are that each block of spectrum allocated for 15 years in 800 MHz will start from a minimum price of EUR 35 million.

In the case of each block of spectrum in 900 MHz allocated for 15 years, the proposed starting price is EUR 40 million.

In the case of spectrum in the 1,800 MHz allocated for 15 years, the starting price per block is EUR 10 million.

Last but not least, in the case of spectrum in 2,600 MHz allocated for 15 years, the starting price proposed by ANCOM is EUR 4 million per duplex block of spectrum and EUR 3 million per simplex block of spectrum.

In the case of blocks of spectrum that will be allocated for a short time-span of 15 months, the starting prices are EUR 3.4 million per each block of spectrum in the 900 MHz and EUR 800,000 per block of spectrum in 1,800 MHz.
Otilia Haraga