Polish MNOs pay sky-high prices in LTE auction

The latest LTE auction to conclude in Europe has been a particularly contentious one, with Poland suffering a year of delays followed by an eight-month process, and then seeing the prices go sky-high. That could drive the costs of 4G services up too high for many users, consumer groups are complaining.

After several delays and false starts, the auction, which started in February, finally concluded last week after the government imposed a time limit on the interminable procedure – though that, in itself, has been controversial, with two bidders – P4 and Polkomtel – threatening legal action on the basis that it was unconstitutional to change the rules mid-process.

The total sums bid were more than five times higher than the government had predicted at the start of the auction. Then, it was expected that the sale would raise about PLN1.8bn ($480m), with five blocks on offer in the 800 MHz band and 13 in the 2.6 GHz band. Instead, regulator UKE puts the final total at PLN9.2bn ($2.46bn).

The regulator has yet to announce the details of each operator’s successful bids, but P4 has already said it has won an 800 MHz block – much coveted to expand coverage cost-effectively – and four 2.6 GHz blocks. It seems that Orange may have acquired two 800 MHz blocks. There were six participants in total – Orange, T-Mobile, P4, Polkomtel, NetNet and Emitel – and the bidding war was partly sparked by the availability of only five 800 MHz franchises.

“The government has simply been too greedy,” telecoms analyst Maciej Bebenek told the local TVN24 Biznes i Swiat TV station, as reported by ZDnet. “One element of the auction was that bidders had to show where they were planning to add LTE coverage, so UKE had a vision on what needed to be done. However, there was no vision about who had to carry it out. In the end, there are five frequency blocks with at least six interested parties.”

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