Czech 4G prices may not be excessive

The Czech Republic’s telecoms regulator may have acted too fast in cancelling its 4G auction due to the high level of bids received to date, Analysys Mason senior manager Mark Colville argues.
The Czech Telecommunication Office (CTO) halted the auction of spectrum in the 800-MHz, 1800-MHz and 2.6-GHz bands late last week, after bids hit 20 billion Korunas (€780 million). The regulator’s chairman, Pavel Dvorak, said it is concerned the bids had become excessively high, which could impact the speed with which 4G networks are deployed in the country, and also the prices charged to consumers.
“We therefore consider it necessary to intervene and prevent future negative consequences for consumers,” Dvorak explained.
However Colville questions whether the auction prices really are excessively high, noting that the figure equates to around €75 per head of population, or €0.25 per MHz for each Czech citizen (MHz/pop).
“These prices are undoubtedly high, but are they excessive? For comparison, the recent UK auction raised around €2.7 billion or €0.17/MHz/pop,” Colville states, adding. “In contrast, the Netherlands auction of late 2012 raised around €0.63/MHz/pop. This auction included 900-MHz spectrum, but the prices paid are considerably higher than those reached in the Czech Republic at the time of cancellation of the auction.”
Colville also suggests that concerns over the cost of spectrum being passed to consumers assumes “a lack of competitiveness in the market.” The tender, which launched in July 2012, had attracted bids from the Czech divisions of Vodafone, T-Mobile, and Telefonica, along with local players PPF and Mobile Services.
The regulator aims to restart the auction in the coming months and complete the sale by the end of the year, a CTO spokesperson told Bloomberg.