Czech Telecommunication Office (ČTÚ) on Friday afternoon announced the results years of the planned auction for 5G frequencies, the course of which he had previously kept everything secret. The competition was supposed to stir the market and depress the prices of calls and mobile data, but the result is likely to be far below expectations.
The auction was dominated by the existing three large operators. They analyzed the most important frequencies in the 700 MHz band for the new fast 5G networks. The new players didn’t even want them, so the existing three big operators got them cheaply, at starting prices. The revenue from the auction is 5.6 billion crowns, compared to the previously expected seven billion.
Two new brands – Nordic Telecom and Centronet – have seen only partial success on other frequencies. But they will not have enough space to build their own independent network. They will be dependent on the so-called “national roaming” – that is, that one of the existing players will let them into its network under regulated conditions, under the supervision of the CTU. The band with which the obligation to provide national roaming was linked was acquired by O2.
The auction is thus a de facto victory for existing operators, led by PPF’s Petr Kellner Group, which controls not only the O2 mobile brand but also the network of the former state-owned Telecom, renamed CETIN. In addition, both new operators, Nordic Telecom and Centronet, are under the control of people who previously belonged to Kellner’s close associates – in both cases, former PPF external lawyers Tomáš Otruba (Nordic) and Karel Pražák (Centronet). Although both now act as independent independent entrepreneurs, it is not entirely possible to bet that they would really like to go after O2.
“I don’t think that the auction will change anything,” says David Slížek, editor-in-chief of the lupa.cz server, according to whom no new strong all-around player will leave the auction. According to him, the quality of the result corresponds to the fact that the CTU announced the results de facto only after the end of the working week – after it also hid during the week that the competition is taking place at all.
“Of course, I’m sorry that the 5G auction didn’t end with the arrival of the big fourth infrastructure player, but I sincerely congratulate the successful operators,” he said. on Twitter to the result, the former head of the CTU, Jaromír Novák, in the allusion that without a “infrastructure player” it is difficult to expect tough competition.
On the contrary, the Minister of Industry Karel Havlíček considers the result a success. According to him, the fact that no large independent rival would come to the Czech Republic was a known thing in advance, which is why the auction rules were also continuously adjusted so that smaller companies would have access to someone large. “The entry of an infrastructure operator into any market through a very small frequency range is unlikely anywhere in the world. That is why I am glad that the CTU came up with the only possible solution, namely the concept of cost-oriented national roaming, “says Havlíček.
According to the original conditions of the auction, part of the most interesting spectrum was to be reserved only for new bidders, so that the existing operators could come under as much pressure as possible. Last year, Prime Minister Andrej Babiš raised the topic of high prices and small data allocations as one of those where he promised to bring improvements through the arrival of a new operator. According to the promises at the time, negotiations were to take place with the operators from the United States, Italy, France, Great Britain and South Korea. After that, there was also talk of the participation of local larger companies, such as Sazka or ČEZ, but even those did not enter the competition.
According to Havlíček, the rules of the auction were modified precisely because the bet on the arrival of a large independent player began to seem unrealistic. Therefore, the CTU changed the rules so that only a small part of the spectrum was enough for new bidders and so that they were entitled to regulated access to large networks. This was then challenged by major operators in court and by the European Commission; it is therefore not 100% clear whether the entitlement of new players will actually last. According to Havlíček, the resistance of big players is proof that competitive pressure exists in this form and that “the auction really goes to the heart of the matter – the price level of mobile tariffs.”
According to Slížek, on the other hand, the real impact on competition may not be particularly large in the end, because new players will always be technically dependent on foreign networks in national roaming. In practice, this can make it difficult to enforce a network that is truly reliable. If there are complaints, it can start to discourage customers.
No competition at infrastructure level will be possible, for example for a new operator to introduce technological innovations. The prices at which small players can get into large networks are not entirely clear either. A fair approach in all these areas should be guarded by the CTU, but its ability to push the three large operators to real change has not been particularly evident in the past.
National roaming exists in Slovakia. The new 4ka operator operates there in this mode and offers unlimited data at home for 14 euros, but it has not shaken the market yet. In international comparisons, Slovakia is still more of a more expensive country. The Czechia is even worse off, although the situation has improved somewhat in recent years. Prices seem high here mainly according to the official price lists for individuals, while corporate tariffs are much cheaper.
Nordic Telecom has already announced that it will want to offer nationwide mobile services. However, it is possible that operators will offer new frequencies only in cities, where they have better access thanks to the purchased frequencies (they do not need to cover such a large area) or will focus on offering a fixed connection on auctioned frequencies. In addition to Nordic Telecom and Centronet, the Ostrava telecommunications company PODA, which provides mobile internet, will also have access to O2 national roaming. Its claim arose from the fact that it had participated in previous auctions, which the existing operators also challenge as an unfair change.
For PPF, averting direct competition in the mobile market is important news. In addition to consumer credit, telecommunications are now a major focus of Kellner’s interest. It also buys telecommunications companies in other countries of post-communist Europe and at the same time invests in private television channels in these countries. PPF sees great potential for connecting the two markets in the future; this also explains the recent purchase of the Nova television station in the Czech Republic.
–
