YOU ARE AT:Archived ArticlesCZECH REPUBLIC BEGINS EFFORTS TO EXPAND WIRELESS COMPETITION

CZECH REPUBLIC BEGINS EFFORTS TO EXPAND WIRELESS COMPETITION

A total of 36 companies have declared interest in bidding for 49 percent of a wireless license offered by the Czech Republic, confirming the economic ministry’s belief that participation would be high in the market.

Bidders include Southwestern Bell Corp., Deutsche Telekom AG, France Telecom and Stet Intl of Italy. Several large Czech utility companies, such as CEZ a.s. and Skoda a.s., intend to bid as well, and are seeking international partners with telecommunications expertise.

AirTouch Communications Inc. had expressed an interest in teaming up with CEZ, but the California-based firm recently let its letter of intent with CEZ expire.

With the license offer, the Czech government is attempting to create competition for its established operator, Eurotel. Eurotel is owned 51 percent by SPT Telecom, the Czech telephone monopoly; U S West Inc. and Bell Atlantic Corp. each hold 24.5 percent.

Eurotel turned on a Nordic Mobile Phone-450 analog system in 1991, which covers 95 percent of the nation and has about 25,000 subscribers.

Last spring, the state announced it would offer two licenses for Global System for Mobile communications networks. One license would go to Eurotel. The second would go to a partnership led by Ceske Radiokomunikace and a partner that would bid for selection.

Ceske is owned 69.4 percent by the National Property Fund, with the remainder held by individual shareholders, privatization funds, restitution and foundation funds. Ceske will hold the majority stake in the license. A decision is expected in February or March.

Eurotel is not allowed to build its GSM network until three months after the Ceske partner is selected in order to give the Ceske alliance a fair start, U.S. Department of Commerce documents report.

Technical telecom expertise and management experience are expected to weigh heavily in the government’s decision, but financially strong companies are needed as well, according to the government.

The Czech Republic was created two years ago when Czechoslovakia split into the Czech Republic and Slovakia. The Czech Republic has a population of more than 10 million but cellular penetration is less than 1 percent.

Hughes Network Systems Inc. installed a fixed wireless network this summer in the Czech capital city of Prague, which will be operated by SPT. The system was initially valued at $12 million. Future plans call for the system to be expanded republic-wide to serve up to 50,000 subscribers.

Government leaders say affordable, mass-market telecom service can accelerate economic growth for emerging financial markets, such as the Czech Republic. Its neighbor, Slovakia, is expected to issue a second GSM license in about two years.

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