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TELECOM - WOULD-BE MOBILE OPERATORS CLAIM COMPETITION WAS UNFAIR

Tender losers challenge Telefónica victory

THE TWO unsuccessful bidders in the tender for the third Slovak mobile operator license, won by Telefónica O2 Slovakia, are not satisfied with the result, and have asked the Telecom Bureau (TÚ) market regulator to repeat it.

THE TWO unsuccessful bidders in the tender for the third Slovak mobile operator license, won by Telefónica O2 Slovakia, are not satisfied with the result, and have asked the Telecom Bureau (TÚ) market regulator to repeat it.

The requests have come from Austrian mobile operator Mobilkom Austria, which finished second in the tender, and the third-place B Four consortium made up of the Czech Radiokomunikace and the Slovak Penta Investments. Other telecom firms have also objected to the tender.

"We believe that the tender was not run in accordance with the Act on Electronic Communications," Penta Investments spokesman Martin Danko told The Slovak Spectator.

Penta complained mainly about a possible conflict of interest in one of the members of the tender committee, as well as of a lack of transparency.

The main doubts raised concern tender committee member Patrik Krauspe, who manages a daughter company of DanubiaTel. GTS Nextra, which did not participate in the tender but is a direct competitor to DanubiaTel, said that during the tender, Krauspe had access to confidential information about Telefónica O2's plans, which he could use to gain lucrative future contracts.

Krauspe defended himself by saying that he was nominated to the committee as a professional in the field and not as an employee of DanubiaTel.

Penta added that the evaluation criteria were assigned a weighting 13 days after the bids were opened, which violated the principles of objectivity and transparency.

On top of that, the TÚ did not set any clear guidelines for the most important evaluation criterion - the contribution to competition in the market - which was assigned a 50 percent weighting. "These methods do not ensure an objective comparison of individual bids," Danko said.

"We asked the Telecom Bureau to either cancel the tender or reveal the bids in detail along with the criteria used and the way the criteria can be met."

In comparison with the dominant competition criterion, the price criterion was weighted at only 5 percent. Telefónica offered Sk150 million for the license, Mobilkom Sk250 million, and B Four Sk400 million.

Penta wants the bids to be compared transparently so it is clear how the first and most important criterion was evaluated.

Penta has also filed a complaint with the Attorney General's Office. If the AGO finds that the law was broken, it could file a motion against the TÚ, which could lead to the cancellation of the TÚ's decision and the revocation of Telefónica's license.

Similarly, the Austrian Mobilkom asked the TÚ not to issue a decision on the allocation of the GSM, UMTS and FS frequencies to Telefónica O2 Slovakia, but instead to repeat the tender.

"In our opinion, the tender was not carried out in accordance with the Act on Electronic Communications. It was not transparent and in line with the norms common to such tenders," the company's international operations chief, Erich Gnad, told the SITA news agency.

The consortium said it will make use of all available options in the Slovak legal system to protect its interests in a statement issued by Eco-Invest, Mobilkom's partner in the tender.

Telefónica O2 Slovakia refused to comment on the activities of its tender competitors. "We are now focusing entirely on launching our business in Slovakia," said Juraj Šedivý, Telefónica O2 Slovakia's general manager, at a recent press conference.

Telefónica O2 Slovakia, a subsidiary of the Spanish company Telefónica, won the tender for a license to become the third mobile operator in Slovakia at the beginning of August this year.

This is the country's third attempt to bring a third mobile operator to Slovakia. The first and second tenders, held in 1998 and 2002 respectively, ended unsuccessfully.

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