LTE auction stopped by Czech regulator due to high bids

The Czech Republic’s 4G spectrum auctions have been suspended by the country’s regulator, CTU, due to concerns that bids were spiralling out of control. The reserve price of CZK7.4 billion($377m) was almost tripled before CTU took the decision to halt the process.

The regulator is acting out of concern for consumers, with the belief that if the 4G-compatible 800MHz, 1800MHz and 2.6GHz bands are sold for too high a price, this will be made up by higher service tariffs. In addition, it could affect the speed of 4G network deployments.

CTU head Pavel Dvorak stated: “When announcing the conditions in the first half of last year, we stressed that the main motivation of the auction was the quick availability of a 4G network for Czech citizens and the possible entry of a fourth operator – never about profits for the state.”

The three available bands had attracted bids from four parties. In addition to the three major operators in the market – the local branches of T-Mobile, Telefonica and Vodafone – a major regional private equity firm, PPF, had entered the auction.

Dvorak confirmed that the frequencies were still planned for auction this year, but did not reveal how the revised auction process would differ from the original to prevent the same problem. The original terms capped spectrum allocations at 2x22.5MHz of 800MHz & 900MHz per operator.

The licence terms oblige operators to roll out commercial LTE services within a two-year timeframe. In addition, they must allow their networks to be used by MVNOs.

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