ANCOM Launches Auction for the 3.4 – 3.8 GHz Band

7.09.2015

Yesterday, 7 September 2015, ANCOM launched the competitive selection procedure for awarding the rights to use the radio frequencies in the 3410-3600 MHz and 3600-3800 MHz bands, by publishing here the official announcement on the auction organisation and putting on sale the Terms of Reference. All the entities interested in obtaining licences for the use of radio frequencies in the auctioned bands may submit application files not later than 5 October.

The Terms of Reference are up for sale until 5 October 2015, at the ANCOM headquarters in 2 Delea Noua Street, Bucharest 3. The person mandated to take the Terms of Reference must present the proof of payment of the counter-value of the Terms of Reference, i.e. RON 4,000.

A candidate intending to take part in the auction must purchase the Terms of Reference and cumulatively meet a series of qualification criteria, such as: it should be a Romanian or foreign company, with an average turnover for the last year of minimum RON 2,000,000; the company lifetime provided in the articles of incorporation should be at least until 1 January 2026; it should have paid its exigible payment obligations to ANCOM, to the state budget, the social insurance budgets and to the special funds etc. Companies belonging to the same group cannot participate in the auction.

The auction commission will analyse the qualification documents submitted and will announce, by 12 October 2015, the candidates qualified in the next stage. By 21 October 2015,the commission will announce the procedure continuation manner (whether primary rounds are required or not, depending on the offer/demand proportion). If the demand exceeds the available resources, the primary rounds will start on 26 October 2015.

ANCOM organizes one selection procedure for both of the frequency bands, auctioning out 16 paired blocks (2x5 MHz bandwidth) to be awarded on a national level in the 3.4 - 3.6 GHz band and 36 unpaired blocks (5 MHz bandwidth) to be awarded on a national level in the 3.6 – 3.8 GHz band. The new spectrum usage rights will enter into force from1 January 2016, for a 10-year period.

The reserve price for each of the frequency blocks in the two bands is the minimum value of the licence fee established by the Government Decision approved on 26 August 2015, namely EUR 370,000 euros for the blocks in the 3.4 – 3.6 GHz band, respectively EUR 185,000 for the blocks in the 3.6 – 3.8 GHz band.

The competitive selection procedure requires that each bidder should submit an initial bid indicating the number of frequency blocks they intend to acquire in each of the two available bands. The initial bids will reveal whether the demand exceeds the offer, whether the demand is lower than the offer or whether the offer equals the demand. In the auction stage, depending on the demand, ANCOM will organize one or several primary rounds, respectively additional primary rounds, as well as an assignment round for establishing the position, within each of the bands, of the frequency blocks won by each bidder. All the bids submitted in the primary and additional primary rounds will target frequency block packages, therefore a bid submitted in a round can be a winning one only as a whole, and a bidder cannot win a frequency block for which it has not bid.

In these bands, the winners will be able to provide, on a nationwide basis - among others - broadband wireless data transmission and internet access services.

Currently, there are seven licences in force in the 3410-3600 MHz band, held by Orange Romania, UPC Romania, Vodafone Romania and 2K Telecom. All of them have been issued for the nationwide provision of public electronic communications networks and services, by means of Fixed Wireless Access (FWA) and Nomadic Wireless Access (NWA) applications. There is one licence in the 3600-3800 MHz band, awarded to the National Broadcasting Company, for the provision of public electronic communications networks and services by means of broadband wireless access (BWA) applications, on a national level. All these eight licences are valid until 31 December 2015.