Romania extends primary auction rounds as demand from telecom companies exceeds spectra offer

The primary rounds of the long awaited telecom bid in Romania will continue today (September 11 ), after the demand exceeded the offer in the first session yesterday, according to Romania's Communication regulator ANCOM.

The operators participating in the auction are: 2K Telecom, Cosmote Romanian Mobile Telecommunications, Orange Romania, RCS & RDS and Vodafone Romania. On the first day of the spectrum auction organized to allocate the frequencies in the 800, 900, 1800 and 2600 MHz bands, two primary rounds were held. The primary rounds will end when frequency block request no longer exceed the number of frequency blocks available, for all the block categories. After the primary rounds, the auction may continue with additional rounds, if there are unassigned frequency blocks, according to ANCOM. The bid will end with the assignment round, when the operators may bid for the desired positioning in the band. ANCOM auctions out the rights for the use of the frequencies in the 800, 900, 1800 and 2600 MHz bands for the provision of mobile communications services – voice and data – for a 15 years period. It is for the first time in Romania that the spectrum licences are granted by means of a competitive selection procedure. The reserve price for each block in the four bands has been set by Government decision. The minimum price for each block in the 800 MHz assigned for 15 years will be EUR 35 million, for the 900 MHz band will be EUR 40 million, and respectively EUR 10 million per block in the 1800 MHz band and EUR 4 million per paired block and EUR 3 million per unpaired block in the 2600 MHz band. For those blocks to be assigned for periods of 15 months, the values have been set at EUR 1.7 million in the 900 MHz band and EUR 0.8 million in the 1800 MHz band. The bid is expected to bring a total of EUR 700 million, EUR 200 million of which will have to be paid by the end of November this year by the winners of the auction. The remainder will be paid by mid 2013. Romania will re-direct all the money it will cash in this year from selling it telecom licenses to agriculture and to helping our farmers whose crops were affected by drought. Following the tender this year, the new licenses for the bands currently owned by Orange Romania and Vodafone Romania will come into force at the beginning of 2013. For the bands currently owned by Cosmote, the new license will become valid in April 2014. Vodafone and Orange paid USD 75 million each for their license back in 1996. Cosmote bought the rights to use the 1,710-1,785 MHz/1,805-1,880 MHz frequencies in 1998, valid for 15 years, for some USD 53 million. editor@romania-insider.com