The Czech telecoms regulator has restarted the country’s 4G spectrum auction process, after a halt because of concern about excessive prices. The previous licensing process was cancelled when the bid amounts massively exceeded the reserve prices.
The CTU concluded that if the licensees had to pay such high prices, they would have less capital available to actually build out the networks, and furthermore would be under pressure to keep prices high.
The spectrum auction will begin by mid-November after a previous attempted sale was aborted in March.
As has been the pattern elsewhere, regulators indicate their belief that a minimum of four national suppliers are necessary.
The CTU intends to reserve a large block of spectrum for a potential newcomer to the market, which already includes Telefonica, T-Mobile and Vodafone.
The three incumbents also are worried that the new entrant might be able to acquire spectrum at a discount. But it might be reasonable to assume that the fourth entrant will have a tough time competing against the three incumbents. In most Eastern and Central European markets, the three top providers have substantial market share.
In Hungary, Vodafone, the smallest of the three mobile providers, has 23 percent share. T-Mobile, the leader, has 46 percent. Telenor has 31 percent share.
In Croatia, T-Mobile has a roughly equivalent market share, while VIPnet has almost that much share. The point is simply that the established providers are entrenched. But most mobile markets are concentrated.
Whether, over the long term, that can change is the question. Many would argue the capital intensity and maturation of mobile markets makes the prospects for new disruptors difficult.
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