BUCHAREST, Romania-Although most of the third-generation (3G) licensing attention in Europe is focused on Western Europe, Eastern European countries are also moving forward with licensing plans. The region, with lower wireless penetration rates than many Western European countries and improving economies, promises to hold much potential for mobile carriers in the 3G arena.
With licensing in full swing in Western Europe, Switzerland will be the next country to award licenses. At Global Wireless press time, industry watchers predicted Vodafone Group and France Telecom would announce investments in the Swiss market ahead of the licensing. Although Eastern Europe’s wireless markets are currently not as large as those to the west, Eastern Europe countries could be just as lucrative for 3G players, given their unfilled demand for telecommunications.
At the beginning of 2000, the mobile market in Central and Eastern Europe, excluding Russia, included almost 15.6 million subscribers, according to the Economist Group. Since the early 1990s, the cellular industry has quickly and steadily increased coverage and subscriber numbers. Nearly every country in Central and Eastern Europe has at least two cellular operators, and the majority are preparing for the third or fourth cellular licensees to enter the market, in addition to 3G network providers.
The licensing process for 3G networks in Eastern Europe is set to begin by year-end in some countries. The principal countries that will award 3G licenses by the end of 2000 or the beginning of 2001 are Poland, Slovenia, the Czech Republic, Slovakia, Estonia, Latvia and Lithuania.
Poland
All eyes are on Poland, which is poised to be the first country in the region to grant 3G licenses. The Polish government must award 3G licenses by the end of the year or wait until 2002 because of a new telecommunications law stating no licenses will be granted in 2001. The government is likely to hurry the bid, because of the more than US$2 billion it could gain for next year’s budget.
Officials in Poland’s Ministry of Communications said a license is promised to incumbent operator Centertel, owned 66 percent by Telekomunikacja Polska. The other operators, Polkomtel and Polska Telefonia, will almost certainly also each receive 3G licenses, said Communications Minister Tomasz Szyszko.
After months of delays and alternating decisions, officials from Poland’s Ministry of Communications announced in mid-October the government will award five 3G licenses. Each of the five licenses will cost more than US$550 million, meaning Poland’s budget in 2001 will gain about US$2.5 billion from 3G fees.
Szyszko said he expects six consortia to participate in the 3G tender launched in October.
“We will extend the license period from 15 years to 20,” said Szyszko.
At press time, GSM operators Centertel, Polska Telefonia and Polkomtel had not decided if they would participate in the 3G tender, which was delayed from November to 1 December. The local operators criticized several tender conditions, specifically the high license fees and the number of licenses that will be granted. At press time, the companies interested in the auction and that had purchased documentation included Centertel, Polska Telefonia, Polkomtel, Telef
