Private equity firm makes bid for Czech LTE spectrum

PPF, one of the largest private equity firms in Central and Eastern Europe, filed a bid with the Czech Telecommunications Office (CTU), the national regulator, to take part in the country's upcoming auction of 800 MHz, 1800 MHz and 2.6 GHz spectrum. The Czech Republic's three existing mobile network operators--Vodafone and the local subsidiaries of Deutsch Telekom and Telefónica--also submitted bids.

The CTU said it will decide by Oct.10 on whether or not the requests meet all the requirements.

It is unlikely that the CTU will throw out any of the applications, especially PPF's. The participation of a newcomer would not only stoke up auction bidding but also, should PPF be successful in acquiring spectrum, increase competition in the country's mobile market. In April, CTU approached around 30 domestic and foreign companies to participate in the auction, but only PPF responded.    

The auction is scheduled to start by the end of the year. Reserve prices have been set at 7.4 billion Czech crowns (€302.5 million) across the three spectrum bands. Along with annual license fees, the CTU estimates the government could raise a sum "in the order of billions of crowns."

PPF has its eyes on the 800 MHz and 1800 MHz frequency bands and hopes to launch services within a year of obtaining a license. Complementing its LTE service, the private equity firm wants to offer GSM through a roaming partnership with one of the country's existing mobile network operators. PPF says it will undercut rivals' prices by 10 per cent.

Under the terms of the auction, operators cannot end up with more than 2x22.5MHz of 800 MHz and 900 MHz combined. A sub-1 GHz spectrum cap places restrictions on the amount of 800 MHz that operators with 900 MHz assets can bid for. The CTU has also earmarked a block of 1800 MHz spectrum for a new market entrant. All license winners must open up their LTE networks to MVNOs and to launch commercial services within two years.

For more:
- see this Reuters article
- see this Bloomberg article
- see this Financi Noviny article  (translated via Google Translate)

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