Romania will sell 56 blocks of mobile telephony frequency spectra in a bid set for later on this year, with starting prices ranging from EUR 800,000 to EUR 40 million. The Romanian National Authority for Management and Regulation in Communications (ANCOM) published the details of the bid earlier today, which is set to start in seven weeks. The results of the bidding selection should be announced in two months, while the actual licenses will be granted by November 2012 and July 2013 depending on the frequency category.

“The levels proposed are justified by the technical characteristics and allow the recovery of costs for freeing up the band– evaluated at EUR 234 million and are directly proportional to the competitive dynamic and the market in Romania. Particularly, the proposed values take into account objective criteria such as the dimensions of the internal market and the average revenues per user – ARPU” according to ANCOM.

Some frequencies up for sale are already partially used by Vodafone, Orange and Cosmote. Vodafone and Orange paid USD 75 million each for their license back in 1996. Cosmote bought the rights to use the 1,710-1,785 MHz/1,805-1,880 MHz frequencies in 1998, valid for 15 years, for some USD 53 million.

The frequencies for sale have been divided into seven categories, each with a variable number of blocks. Five of them will be valid for 15 years, the rest for 15 months. The most expensive is the 880-915/ 925- 960 MHz band, where the starting price is of EUR 40 million for seven blocks within the band. Second comes the 791-821/ 832- 862 MHz band, with six blocks and a starting price of EUR 35 million. The third biggest price is EUR 10 million for 15 blocks in the 1710-1785/ 1805-1880 MHz band. Prices vary depending on the technical qualities of the bands. For example, lower frequencies tend to transmit over longer distance and bring better coverage in buildings, but have a smaller bandwidth, which means they can carry less information.

Each of the seven categories comes with a set of obligations for the eventual bid winners, mostly related to a mandatory minimum coverage level. Those who buy blocks in the 800-900 MHz bands will have to give priority to the coverage of 107 localities for each of the blocks bought. Those who buy blocks in the 1800 MHz and/or 2600 MHz bands will have to cover at least 30 percent of Romania's population by April 2019.

The communication authority has extended the licenses for Orange and Vodafone until the end of 2012. Each operator will have to pay EUR 6.4 million for the license extension.

editor@romania-insider.com

(photo source: Sxc.hu)