Romania's communications authority announces end of first stage of the great spectra sell off

Romania's communications authority ANCOM announced the closure of the first round of bidding for mobile phone spectra yesterday (September 18 ). On Friday (September 21 ) the assignment rounds will begin and continue the following Monday. According to ANCOM the first round of bidding established which companies will have each spectrum block, while the assignment round will determine which specific frequencies each firm gets.

The bidders are to pay extra for the assignment of specific frequencies beyond the basic price for generic blocks. The successful companies continuing to the next stage following the first round of bidding are 2K Telecom, Cosmote Romanian Mobile Telecommunications, Orange Romania, RCS & RDS and Vodafone Romania. Each will have the option of bidding for specific frequencies, but companies that are indifferent to which frequencies are assigned can choose not to bid. ANCOM also states that if specific frequencies receive offers of an equal value, the winning company will be allocated by lot. Romania’s Communication Authority ANCOM opened bidding for mobile phone spectra on July 2. ANCOM is awarding long term licenses valid until April 2029, as well as short term licenses which are available for one year and three months. The cost for participating in the auction was set at around EUR 1000. The reserve price for each block in the four bands was set by Government decision. The minimum price for each block in the 800 MHz assigned for 15 years is EUR 35 million, for the 900 MHz band EUR 40 million, EUR 10 million per block in the 1800 MHz band and EUR 4 million per paired block or EUR 3 million per unpaired block in the 2600 MHz band. For blocks assigned for periods of 15 months, the values were 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 cashed in this year from selling telecom licenses to agriculture and to helping 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. Liam Lever, liam@romania-insider.com photo source: sxc.hu