EU OKs discounted 3G license for Vodafone's Czech unit

The EU Commission said that it saw no problems with a Czech 3G mobile phone license granted at a cut price to a Vodafone subsidiary, an Associated Press report said.

The Associated Press report said Telefonica's Eurotel and T-Mobile companies complained of unfair treatment when the Czech government sold a third 3G license to Vodafone's Oskar last year for 2 billion Czech crowns ($87 million), far lower than the fees they paid in 2001.

But the European Commission ruled there was no discrimination and the lower price was not an illegal state subsidy, the report said.

'The commission is satisfied that the Czech authorities have not favored the winner of the third 3G license,' EU competition commissioner Neelie Kroes was quoted as saying..

'We have concluded that the lower price with respect to previous 3G licenses simply reflects the dramatic change in market conditions between 2001 and 2005,' she said.

Vodafone said in July it would indefinitely postpone plans to launch a 3G UMTS network because costs were too high and customers were not interested. The license obliges it to start a service by January 2008, the report said.

The British telecoms company acquired Oskar, the Czech Republic's third biggest mobile phone operator, for $3.5 billion last year, it added.

In 2001, T-Mobile paid 3.9 billion Czech crowns ($152 million) for its license with Eurotel handing over 3.5 billion Czech crowns ($138.63 million).

The report further said the Czech government calculated the price both times by using a study comparing fees charged for 3G licenses in other countries.

The price drop was a result of lower license prices in 2005 and 'the dramatic decrease in 3G revenue forecasts in recent years,' the EU commission said.

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