Poland's Plan to Cut Short 4G Auction Risks $558 Million Claim

  • P4 sees up to 500 million euros of damages if auction changed
  • Operator seeks amicable solution or new sale of frequencies

Poland’s fourth-biggest mobile phone operator said it may sue the government if it changes the rules of an ongoing auction for high-speed mobile frequencies.

Kifissia, Greece-based Olympia Development SA, which owns operator P4 sp zoo, said in an e-mailed statement that Poland’s plan to stop the bidding for the Long-Term Evolution, or LTE, frequencies after 115 auction days would cause an “irreversible infringement of interests” for its unit and and may cause “tangible damages” up to 500 million euros ($557 million).

Olympia, referring to a Poland-Greece investment treaty, is piling more pressure on the government as the country seeks to end an already eight month-long auction in October. Administration Minister Andrzej Halicki’s proposal was criticized by other bidders, including Cyfrowy Polsat SA’s mobile unit Polkomtel Sp zoo and Deutsche Telekom AG’s AG Polish unit T-Mobile Polska SA. With offers totaling 7.39 billion zloty ($1.95 billion) as of Sept. 22, Polish licenses are working out almost as pricey as those in France and Germany despite lower revenue per customer.

“We need the frequencies and we are strongly in favor of a quick sale of them to operators,” Jorgen Bang-Jensen, P4’s chief executive officer, told Bloomberg by phone on Tuesday. “The country may get into long-lasting legal disputes that would be harmful for the whole industry” if it cuts short the auction, he said.

The administration minister hasn’t made a final decision on the auction. Artur Koziolek, the ministry’s spokesman, didn’t answer an e-mailed request for comment and two calls to his mobile phone on Tuesday.

“The auction should be canceled, and a new sale process should be quickly held, with a possible outcome in weeks,” Bang-Jensen said. He declined to discuss P4’s bidding strategy or possible ways to finance the purchase of new frequencies.

P4’s parent Olympia said it’s “determined to seek an amicable solution with the Polish government, which will support quick spectrum allocation without violating the rights of the participants of the ongoing auction.” The company will seek arbitration if Poland “insists on solutions which violate” its rights, it said.