Orange, Vodafone and Cosmote, the three largest mobile telephony operators on the market, will have to fight to keep their operating licenses in Romania as of 2013 (the former two) and 2014 (the latter).
What is for certain is that the auction will be open and any operator will be able to compete provided they meet certain yet unspecified requirements, so that a company other than those already on the market could, at least in theory, buy the right to use those “parts” of the radio spectrum that Orange, Vodafone and Cosmote use.
It is also almost certain that RCS&RDS will buy a 5 MHz block of the 900 MHz band where Orange and Vodafone will free up some “space”.
Here are eight of the most important questions that ANCOM is to answer in the first part of this year, about the auction that might translate into revenue of EUR200 million to EUR400 million for the government.
1. The exact date of the radio spectrum auction. The communications market regulator only said that it would be held in the first part of 2012.
2. Conditions to participate in the auction and the publication date thereof. Several scenarios about how the auction will be organized and what conditions will be set are being discussed on the market at the moment. ANCOM only said that details about auction would be published as soon as it had talked with the telecom operators.
3. The new license period. The licenses may be valid for ten or fifteen years but the market regulator has yet to make a decision.
4. The minimum fee the operators will be charged. ANCOM chairman did not provide any details, but mentioned Greece as an example. The country got EUR380 million from the sale of the licenses using a similar auction systems and awarded them for fifteen years. The Romanian government could get at least EUR200 million out of this, if no 4G licenses are sold, official sources close to the talks say. If 4G licenses are auctioned as well, then the amount might double.
5. When will the fee be paid? Operators have paid their GSM and 3G license fees in installments over a number of years until now. Will ANCOM use the same approach or demand payment in one go?
6. Will the National Defense Ministry free up the 800 MHz band so as to be possible to use for 4G services? ANCOM announced that it planned to put up for sale part of the spectrum currently used by the Defense Ministry during the same auction in 2012 so that operators could use it for 4G services. Nothing is yet certain, considering that the market watchdog chairman himself said that he only “has reason” to believe but was not positive that the ministry would make the spectrum available in the first part of the year.
7. When will Romania have 4G networks if the spectrum used by the military is not sold in 2012? If the Defense Ministry goes against ANCOM’s expectations and does not clear the necessary spectrum for 4G networks, when will the auction be held and when will Romania have operators capable of providing such services? The Hungarian subsidiary of Germany’s Deutsche Telekom has already launched 4G services in Budapest on January 1, 2012.
8. Will the 18 million customers of Orange and Vodafone have cellular service problems? ANCOM’s conditions for this year’s radio spectrum auction might force Orange and Vodafone, the market’s largest operators, to free up part of the 900 MHz band they use if they want to be allowed to bid for the 800 MHz band, allocated to 4G services. If that happens, the question is how much time will Orange and Vodafone be given to comply and what impact will this operation have over the services provided by the two operators over a limited period of time (four months for instance) given the current competition on the market?
(English version by Loredana Fratila-Cristescu)