Банкеръ Weekly

Briefs

COMPETITION IN TELECOMS GAINS SPEED

TRANS TELECOM AND CABLE NET HAVE WON THE TENDER FOR WIRELESS NATIONAL NETWORKSA two-day bidding for the two newest telecom licences, held in Sofia October 11 and 12, will certainly remain in history, not only because of the 15-hour-long competition, but also due to its transparent and clear rules. The BGN10MN-plus which the tender winners will pay to the State should not be ignored either. These are the alternative operators Trans Telecom and Cablenet which won the tender for setting up wireless national networks, allowing access to a broadband INTERNET, telephone and other multimedia services, without a cable connection. Each of the two companies paid BGN5,044,000 for a class A licence. The bidding started at 10.00 hours on October 11 at an initial price of BGN1,344,000 and a minimum bidding rate of BGN100,000. The procedure was opened by Georgi Alexandrov, Chairman of the Commission for Regulation of Telecommunications (CRT), who had been dismissed three times and a week ago was restored his post again. The competitors involved MobilTel, BTC, Nexcom - Bulgaria, Trans telecom, Cablenet and Carrier BG. After almost 12 hours of fierce bidding it was suspended in the evening when the price reached BGN4,544,000 and two competitors withdrew. MobilTel stopped bidding at BGN4.1MN, and BTC - at BGN4,444,000.The licences will be valid for ten years. The winners should start operations within nine months after getting the permission. Within a year they should ensure coverage of at least 20% of the population in ten Bulgarian towns, and cover 30 towns in three years. The initial investment in technology is estimates at BGN10MN at least, the CRT specified. 70% of the BGN10MN-plus, paid for the two licences, will enter the budget, 5% will remain in the CRT, and the balance of 25% will go to the new agency for info technologies and telecommunications. In end-July the CRT announced two tenders for granting five individual licences for the establishment of networks in the frequency range of 3.4-3.6 gigahertz (two of class A with a broad band, and three of class B with more restricted possibilities). The new technology is in fact a wireless alternative to the BTC's fixed telephone network. Its main advantage is the opportunity to set up connections in distant places where it is economically inefficient to lay a cable, as well as in highly urbanized regions. The quality of transmission is very high (comparable and even better that transmission via an optic fibre cable). The wide spectrum of offered services should be noted as well: two-way transmission of voice and data in real time, access to INTERNET, fax, telex, video information, and multimedia applications, i.e. everything for which even alternative operators currently rely on the BTC. This technology practically gives telecom companies an opportunity to set up their own fixed networks and reach their end clients by themselves. It is also attractive to the national telecom, because one of its obligations, according to the licence issued during its privatisation, is to provide telephone services to the people from Bulgarian regions where access is difficult. Therefore, perhaps, 33 firms showed interest by the deadline for buying tender dossiers, August 19. On September 19, however, only six of them filed offers for class A. The same companies have applied also for the smaller class B licences, but the winners from the last tender may not take part in the second competition, scheduled for October 25. It will start at an initial price of BGN672,000 for a licence and a minimum bidding rate of BGN50,000. Most probably, the competitors will be also six, because OrbiTel and Giti Bulgaria have applied as well in addition to the above-mentioned firms.In other words, five telecom operators will get licences for the new wireless networks by end-October. In their battle for clients they will compete not only with BTC, but between themselves, too. According to expectations, big businesses will be initially interested in their services, because the end devices currently cost about USD550. CRC members, however, believe that the telecoms will introduce rescheduled payment and will even undertake some of the expenses of their first customers.

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