Romania Launches Major Spectrum Auction

The Romanian regulator ANCOM has opened the bidding for spectrum auctions in the Eastern European country. The licences will be valid for 15 years from 2013, and will be available in the 800MHz, 900MHz, 1800MHz and 2600MHz frequency bands.

According to ANCOM, interested parties may submit applications until 13 August 2012. The auction commission will examine the submitted qualification documents and will announce the candidates that qualify for the next stage by 20 August 2012, so as to be able to start holding the auction on 10 September 2012. The auction procedure will be open, ascendant, multi-bands and multi-rounds, and its duration depends on the number of bidding rounds to take place. ANCOM estimates that the final results are to be announced in October.

The application file must contain documents attesting to the candidate’s situation, proving, among others, the fulfilment of the obligations to the state budget, to the social insurance budgets and special tax funds, and also that the respective candidate meets the participation requirements. Thus, the candidate must be able to prove an average turnover of minimum EUR 10 million for the last 3 years, must not be in a state of insolvency or liquidation, its business must not be managed by a syndic judge, its commercial activities must not be suspended, the candidate may not be a member of another candidate’s group a.s.o. The application file will also include the initial bid which is to indicate the number of blocks which the candidate wishes to acquire in each of the available spectrum categories.

Two types of licences will be awarded under the auction: long-term licences (15 years, valid until April 2029) and short-term licences (1 year and three months, valid until April 2014). For the long-term licences, ANCOM will auction out 42 paired blocks of 5 MHz each, 6 of which in the 800 MHz band, 7 in the 900 MHz band, 15 in the 1800 MHz band and 14 in the 2600 MHz band, as well as 3 unpaired blocks of 15 MHz each in the 2600 MHz band. These licences will be awarded starting 6 April 2014. With regard to the short term licences, ANCOM will auction out 10 paired blocks of 2.5 MHz in the 900 MHz band and 6 paired blocks of 5 MHz in the 1800 MHz band, resources which are currently used by Orange and Vodafone.

The Terms of Reference presents the minimum coverage requirements, which range in keeping with the bands won, the previous existence on the Romanian market and granting of access for the mobile virtual network operators (MVNO). Furthermore, ANCOM imposed different minimum coverage requirements depending on the voice and Internet services to be offered by means of the obtained spectrum, as well as national roaming temporary obligations in the existing GSM and IMT-2000/UMTS networks, for the network providers with a coverage exceeding 30% of the population. In order to encourage the emergence of mobile virtual network operators, ANCOM provided incentives for the bidders that will allow the access to their networks for the MVNOs, such as the reduction in bidding guarantee and more generous terms for the fulfilment of the coverage obligations.

The Terms of Reference may be purchased starting 2 July 2012, every working day, from the ANCOM headquarters in 2 Delea Noua Street, Bucharest, Sector 3 or, upon the request of the interested persons, transmitted on hardcopy or in electronic format, based on the submission by the interested person of the document certifying the payment of a non-refundable amount of RON 4500 lei, the countervalue of the Terms of Reference, in original. Only the persons who purchased the Terms of Reference may submit a bid in the auction.

The deadline set for submitting the application file and the initial bid is 13 August 2012, 17:00 hours.

Based on the starting prices of the auctioned spectrum, Romania could raise around 700 million Euros. Offering new frequency bands, 800 MHz and 2600MHz, this spectrum auction is an opportunity for a new entrant. 

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