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GSM 1800 licence to be shared by Globtel and EuroTel

Telecom Minister Gabriel Palacka announced on June 15 he would not call a third tender for a 1800 MHz GSM band mobile phone licence after two previous tenders flopped - opening the band for the two current GSM operators, Globtel and Eurotel. The latest tender for the licence, with a deadline of April 15, from which the two current mobile network operators were excluded, failed because the ministry received no bids.
The ministry has said that potential applicants were probably deterred by Slovakia's poor economic outlook and the saturation of the Slovak mobile market. However, Are Mathisen, country director for Telenor Slovakia, one of the three companies reported to be interested in the tender, disagreed. Telenor applied for the first GSM 1800 tender in August last year, Mathisen said, but had not bothered to enter the second tender because of its unfavourable conditions, including a minimum purchase price for the license of ten million dollars.

Telecom Minister Gabriel Palacka announced on June 15 he would not call a third tender for a 1800 MHz GSM band mobile phone licence after two previous tenders flopped - opening the band for the two current GSM operators, Globtel and Eurotel. The latest tender for the licence, with a deadline of April 15, from which the two current mobile network operators were excluded, failed because the ministry received no bids.

The ministry has said that potential applicants were probably deterred by Slovakia's poor economic outlook and the saturation of the Slovak mobile market. However, Are Mathisen, country director for Telenor Slovakia, one of the three companies reported to be interested in the tender, disagreed. Telenor applied for the first GSM 1800 tender in August last year, Mathisen said, but had not bothered to enter the second tender because of its unfavourable conditions, including a minimum purchase price for the license of ten million dollars.

"Minister Gabriel Palacka decided not to call a new tender," the ministry said in a prepared statement. "[Instead] he will amend the GSM 900 MHz licences for the firms EuroTel and Globtel, in order to grant them frequencies within the 1800 MHz band. The licence amendments for Globtel and EuroTel will set conditions for the universal use of the frequencies concurrently with their GSM 900 MHz licence maturities," the statement said.

As a precondition for granting the 1800 MHz frequencies, the ministry has asked EuroTel and Globtel to pay $10 million each, the statement said. When contacted by The Slovak Spectator, Globtel Commercial Director Pavol Lančarič confirmed that his company was indeed prepared to pay the ten million dollars for the license. Meanwhile, EuroTel's Director of Marketing and Sales Ján Plachý said EuroTel would "probably" be interested. "We will have to check with our shareholders, but I think that yes, we will pay [the ten million dollars] for the license," he reported.

The original tender for a 15-year licence was cancelled in August, 1998 when then-Minister Ján Jasovský said that neither of the two competing firms, Telenor and Tatrytell, had met the required conditions for the bid. The second tender, called in January, set a minimum price of $10 million for the license, while the ministry promised not to grant other mobile licences on the same band for four years.

Slovakia's two current mobile network operators, Globtel and EuroTel, do not publish the number of active customers, providing only the number of activated customers. As of May, 1999, Globtel reported over 400,000 customers while EuroTel checked in with some 300,000.

Globtel, which launched operations in Slovakia in 1996, is owned by a consortium of France Telecom with 35%, the Slovak holding company Slovtel with 29% and several state-owned utilities with 36%. The government announced earlier this year that it would like to sell off the state's shares in Globtel in order to raise money for the budget.

Eurotel began operations in Slovakia in 1991 and is owned by the state-run monopoly Slovenské Telekomunikácie with 60% and by the US West Media Group and Bell Atlantic Corp with 40%. Globtel works exlusively on the GSM 900 frequency while EuroTel has customers on both the GSM 900 and the analogue NMT networks.

Reuters contributed to this story

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