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TELECOM MARKET WATCHDOG WILL RECALCULATE LICENSE EXTENSION FEES

Court’s verdict sides with Slovak Telekom

Hefty fees that telecom market watchdog, the Telecommunications Office, imposed on mobile operators for extending their frequency licences last year came as a surprise to the operators. Both of them appealed the fees, contesting their volume and citing a non-transparent procedure, a discriminatory attitude and factual flaws in the methodology. The Supreme Court complied with the objections raised by Slovak Telekom and ordered the office to recalculate the fees. Slovak Telekom has welcomed the verdict and Orange Slovensko, another affected telecom operator, expects a similar verdict in its case.

(Source: SME)

Hefty fees that telecom market watchdog, the Telecommunications Office, imposed on mobile operators for extending their frequency licences last year came as a surprise to the operators. Both of them appealed the fees, contesting their volume and citing a non-transparent procedure, a discriminatory attitude and factual flaws in the methodology. The Supreme Court complied with the objections raised by Slovak Telekom and ordered the office to recalculate the fees. Slovak Telekom has welcomed the verdict and Orange Slovensko, another affected telecom operator, expects a similar verdict in its case.

The Telecommunications Office will first wait for the written version of the Supreme Court’s verdict, TÚ’s spokesperson Roman Vavro said after the court’s session on August 23 as cited by the SITA newswire. Afterwards TÚ will recalculate the license extension fee.

“The return of the fee for the license extension paid by Slovak Telekom last year was neither the object of complaint nor the ruling of the court,” said Vavro as cited by SITA, adding that this means that Slovak Telekom can continue to provide mobile services.

In its verdict the Supreme Court questions the way in which the TÚ had calculated the license fee for Slovak Telekom and not the extension itself, the daily Sme wrote on its website.

According to judges of a senate of the Surpeme Court Jana Baricová, Jarmila Urbancová and Milan Morava, officers of the TÚ did not provide reasons for why they calculated the fee from monthly revenues of operators.

“It is not up to us to assess the method; it is a matter for the office,” Jana Baricová, the head of the court said as cited by the Sme’s website. “But this contemplation must be clear, justified and transparent to be in line with the law. This was not this case.”

In the verdict the judges agreed with Slovak Telekom that the office had calculated the fees from data that it received for a different proceeding and then pulled out of context.

The TÚ used data provided by operators, but these had not been required from operators within the proceeding on the license extension.

A bit of history

Last summer, the Telecommunications Office (TÚ) extended the frequency licences of the country’s two largest existing operators, Orange Slovensko and Slovak Telekom, the latter of which markets mobile services under the T-Mobile brand. The companies’ original licences were valid until the end of August, 2011 but it was not until August 10, 2011 that the TÚ announced that it would extend them for another 10 years. The cost of the extensions was released the following day: almost €41 million for Orange Slovensko and almost €48 million for Slovak Telekom. In 2006 Telefónica Slovakia, the third mobile operator, paid €5 million for similar licenses – for 20-year GSM and 3G licences.

Mobile operators abroad pay comparable or even higher fees. For example, Greek operators got the licenses for €60-90 million, the Hospodárske Noviny daily wrote.

“In western countries the sum is usually set as a certain percentage share form the turnover,” said Jozef Orgonáš from PC Revue magazine. “The more the operator gains, the more it pays to the state. This is the most transparent way for granting a license.”

Both operators appealed the TÚ’s decision. Slovak Telekom filed a complaint with the Supreme Court citing retroactivity and unconstitutionality of the revision to the law on electronic communications, SITA wrote. The revision obliged the TÚ to require a fee for the license extension and simultaneously cancelled all previous proceedings of the office in the matter. Thus the TÚ had to cancel the first application of Slovak Telekom for the license extension, which it had submitted before the revision became effective.

Orange Slovensko responded in a similar way.

“With regards to this decision I do not assume that the verdict in our case would be different,” Ivan Marták, the head of regulation department at Orange Slovensko said as cited by the Sme daily on its website.

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