Czechs Cancel 4G Auction as ‘Excessive’ Bids Top $1 Billion

The Czech telecommunications office canceled an auction for radio frequencies after bids rose above $1 billion, the regulator said.

Offer from the four groups taking part in the auction -- Telefonica AS, T-Mobile Czech Republic AS, Vodafone Czech Republic AS and PPF Mobile Services AS -- totaled more than 20 billion koruna ($1 billion) and “were still rising,” the Cesky Telekomunikacni Urad said today in an e-mailed statement.

“Such excessive prices of the auctioned frequencies would have to negatively translate into excessive charges for fast mobile Internet,” CTU Chairman Pavel Dvorak said in the statement. “We therefore consider it necessary to step in and prevent future negative consequences for the customers.”

The telecommunications office was offering radio frequencies in the 800 MHz, 1800 MHz, and 2,600 MHz ranges. The auction should help develop high-speed mobile broadband services, ensure an effective usage of frequencies and boost competitiveness on the market by an entry of a new provider.

The watchdog still plans to sell the spectrum this year, CTU spokesman Frantisek Malina said by phone today. The asking price for the frequencies for the new auction will be the same, or higher, than in the previous one, he said.

According to Malina, it is not clear yet what type of auction CTU will announce and how it will specifically limit participants not to influence the length of the sale.

The new auction may start in two months, CTU head Pavel Dvorak told CTK. Meanwhile, CTU will draft new conditions for the sale, which should prevent prolonging or filing an “unrealistic” price for the frequencies that would mean passing the costs to customers, CTK said citing Dvorak.

The auction was influenced by the “higher willingness” of the existing operators to invest in a small market and a “huge” desire of the potential fourth provider to become a new entrant, Dvorak told CTK

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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