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NEW OPERATOR JOINS THE TWO MOBILE GIANTS IN THE RACE FOR CUSTOMERS

Third operator takes the call

TELEFÓNICA O2 Slovakia, a subsidiary of Spanish tele-communications company Telefónica, will be the third mobile giant to enter the Slovak telecom market.

TELEFÓNICA O2 Slovakia, a subsidiary of Spanish tele-communications company Telefónica, will be the third mobile giant to enter the Slovak telecom market.

A nine-member selection committee recently awarded Telefónica O2 Slovakia the highest recommendation, leaving behind the other two bidders: the daughter company of Telecom Austria mobilkom and B Four, a consortium of Czech Radio-komunikace with Penta.

"The Telecommunications Office of the Slovak Republic (TÚ) will grant a license to the winner of the tender for the frequencies 900 and 1800 MHz for GSM bands and 29GHz in UMTS and FS bands within four weeks," TÚ spokesman Roman Vavro wrote in a memo for The Slovak Spectator.

According to Vavro, there is no risk of the tender being abandoned.

"If the winner changes its mind or fails to pay for the frequencies, the telecom authority, in line with the law on electronic communications, will issue the license to the second-ranked bidder of the tender," Vavro says.

The telecom authority will publicise the conditions for Telefónica's operation only after the license becomes valid.

A source close to the tender commission told the SITA news wire that Telefónica O2 Slovakia's bid of Sk150 million was actually the lowest.

Austrian mobilkom Austria reportedly bid Sk250 million, while B Four confirmed its bid was Sk400 million.

However, the TÚ made it clear before announcing the tender that the decision would favour operators without links to the existing market players, that promise to increase competition, demonstrate the capacity to develop their own network and are armed with experience in providing electronic communication services of GSM and UMTS mobile networks.

"The criterion of boosting competition on the market will carry the most weight and only after that will come the price the applicant offers for the license," Vavro told The Slovak Spectator in July.

According to the TÚ, boosting competition carried 50 percent of the weight in the decision, while price only 5 percent.

Telefónica O2 has so far been tight-lipped about its plans on the Slovak market.

Spokesman of Telefónica O2 Martin Žabka told the SME daily that the operator first wants to become familiar with the license conditions and that the company's main goal is to contribute to the competitiveness of the telecom market.

However, Telefónica O2 will hurry to join the Slovak market before the 2006 Christmas season, which usually provides a fertile commercial harvest for mobile operators.

Mobile market watchers say the only way Telefónica O2 can make it onto the market will be to offer a crusade of long-term, rate plans and services.

Even so, the two mobile giants, T-Mobile and Orange, say they are not intimidated by the competition and will continue fighting for each customer.

Telefónica O2 Slovakia was set up in November 2002 under the name Czech Telecom Slovakia. It has been using its current name since June 27 of this year. Its sole partner is Czech company Telefónica O2 Czech Republic.

Spanish telecommunications group Telefónica bought a 51.1-percent stake in Czech Telecom for CZK82.6 billion last June. In addition to Czech Telecom, the firm integrated under the joint brand O2 also Eurotel as of July 1 and currently operates under the name Telefónica O2 Czech Republic.

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