Only one personal communications network license will be awarded in the Netherlands this year, reported the American Embassy in The Hague.
However, the Dutch Ministry of Transport and Telecommunications is expected to issue a second license once more spectrum is cleared, said Embassy Consultant Mark Armitage.
The ministry originally planned to award just one Digital Cellular System 1800 license, but last fall, under the recommendation of two independent consultancies in the United Kingdom, it reconsidered issuing two. The consultants suggested available spectrum be split between two DCS 1800 players, and each be guaranteed more spectrum once it was available.
Justine Hayes, an analyst with the Yankee Group in London, said 50 megahertz of spectrum, currently occupied by the Post Telephone and Telegraph, would be cleared for mobile telephony by 2000.
Nonetheless, the ministry concluded the benefits of immediate competition between two new operators do not outweigh the deficiency of spectrum and the delay that would result from passing new legislation for two operators.
To comply with European Union rules fostering competition, members must issue two DCS 1800 licenses by next January. Exceptions to the rules are made for spectrum shortage or too few interested bidders.
The government will invite bids in May or June, and plans to announce a winner in September or October.
The first DCS 1800 operator will be awarded a license for 15 megahertz, said Armitage, noting that some spectrum is expected to go to the existing cellular operators, Libertel and PTT (Post Telephone and Telegraph) Telecom BV.
Armitage also expects either Libertel or PTT Telecom to receive the second DCS 1800 license.
“I think there is room in the market for two operators if they are both awarded at the same time and awarded quickly,” remarked Hayes last month, when a decision about the licenses was expected. She said a second operator could have trouble competing if they enter the market later.
Cellular operators PTT Telecom BV and Libertel have a combined penetration of about 6 percent in the Netherlands, said Hayes. PTT Telecom is a subsidiary of Royal PTT Netherlands. Libertel is owned by ING, a Dutch banking group, and Vodafone plc of the United Kingdom.
DeTeMobil, Germany-based Deutsche Telekom’s mobile subsidiary, has signed a memorandum of understanding with Enertel, the Netherlands’ electric utilities and cable group, to participate in the bidding for a DCS-1800 license, noted Hayes.