Primary Rounds of the Spectrum Auction in Romania Start on the 10th of September

23.08.2012

After analysing the initial bids submitted by the five operators as part of the spectrum auction, the Commission announces that the holding of primary rounds is required since the initial aggregated bid of the five bidders exceeds the number of available blocks in at least one band. Thus, the actual auction will begin on the 10th of September 2012, so that the final results be announced in October. The operators participating in the auction are 2K Telecom, Cosmote Romanian Mobile Telecommunications, Orange Romania, RCS & RDS and Vodafone Romania.

During the first primary round, the price for each block in the bands auctioned by ANCOM will equal the reserve price for the respective category. Each bidder is invited to submit one bid stating the number of blocks in each category it wishes to bid. By the closing of each primary round, all submitted bids are aggregated and, in case during that round the demand exceeds the number of available frequency blocks in one or several categories, a new primary round is scheduled. In case several primary rounds are being held, the price for one block within those bands where there is excess demand will be increased and communicated to the bidders. The primary rounds end after a round in which the demand for blocks does not exceed the number of available frequency blocks, for all categories of blocks.

Following the primary rounds, the auction may continue with additional rounds if there are frequency blocks remaining unassigned after the primary rounds, and will end with the assignment round, where the bidders may bid for the desired positioning in the band.

ANCOM auctions out the rights for the use of the frequencies in the 800, 900, 1800 and 2600 MHz bands for the provision of mobile communications services – voice and data – for a 15 years period. It is for the first time in Romania that the spectrum licences are granted by means of a competitive selection procedure.

As part of the procedure, the bidders may bid for two types of licences: long-term licences (15 years, valid until April 2029) and short-term licences (1 year and three months, valid until April 2014). For the long-term licences, ANCOM will auction out 42 paired blocks of 5 MHz each, 6 of which in the 800 MHz band, 7 in the 900 MHz band, 15 in the 1800 MHz band and 14 in the 2600 MHz band, as well as 3 unpaired blocks of 15 MHz each in the 2600 MHz band. These licences will be awarded starting 6 April 2014. With regard to the licences to be awarded for a shorter period, ANCOM will auction out 10 paired blocks of 2.5 MHz in the 900 MHz band and 6 paired blocks of 5 MHz in the 1800 MHz band, most of these resources being currently used by Orange and Vodafone.

The reserve price for each block in the four bands has been set by Government decision. Thus, each block from the 800 MHz assigned for 15 years will have a minimum price of EUR 35 million, those from the 900 MHz bands will have the minimum price of EUR 40 million, respectively EUR 10 million per block in the 1800 MHz band and EUR 4 million per paired bloc and EUR 3 million per unpaired block in the 2600 MHz band. For those blocks to be assigned for periods of 15 months, the values have been set at EUR 1.7 million in the 900 MHz band and EUR 0.8 million in the 1800 MHz band.