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Romtelecom’s Mobile License Fee Discourages Competition – Vodafone Romania

The granting of a mobile communication license to Romanian operator Romtelecom at a much lower price than that paid by other operators favors Romtelecom and affects competition, officials of mobile operator Vodafone Romania said Monday.
Romtelecom’s Mobile License Fee Discourages Competition - Vodafone Romania
08 sept. 2008, 15:17, English

"Vodafone will take legal action, considering the decision announced today (Monday -e.n.) does not encourage fair competition on the mobile communication market," Vodafone Romania officials said.

Romania’s communication and information technology regulator ANRCTI said Monday that Romanian telecom operator Romtelecom, majority owned by Greece’s OTE, won the auction for the national license for the use of radio frequencies 410-415/420-425 MHz to provide data network and mobile communication services.

Romtelecom will pay a license fee of EUR1,077,228. The operator will also have to pay an annual fee to the regulator for the use of frequencies, in compliance with Romanian telecom laws.

Vodafone Romania is the second largest mobile operator on the Romanian market, with 9.256 million clients end June. In 1996, the company paid $75 million for a GSM license valid for 15 years in an auction organized by Romanian telecom authorities.

Alongside Orange Romania, Telemobil and RCS&RDS, Vodafone Romania challenged the normative act regulating the granting of mobile communication licenses and requested the suspension of government decision 61/2008 regulating the selection procedure for mobile communication licenses.

A new term in the trial was set for Tuesday, September 9.

"As the Competition Council said, shareholders of operators that already had mobile communication licenses were not eligible to take part in the auction. With the decision announced today, the authorities’ initial objective, to increase competitiveness on the mobile telephony market, was no longer a priority as the majority shareholders in Cosmote and Romtelecom now own two licenses,” Vodafone Romania officials added.

In turn, Romtelecom official Catalin Dima said fair competition on the Romanian mobile telecom market is only possible “now”, with Romtelecom acquiring this license.

"Our group was the only large telecom operator on the Romanian market with no license to provide mobile broadband services, unlike Vodafone and Orange, which own 3G and Wimax licenses, RCS&RDS, which has a 3G license and Telemobil (Zapp Mobile), which ahs CDMA and 3G licenses," Dima said.

He added Romtelecom was eligible to take part in the auction, as owner OTE had no mobile broadband license.

Romtelecom is majority owned by Greek telecom group OTE with a 54.01% stake in the Romanian operator. Romtelecom owns 30% in the local division of Greek mobile operator Cosmote, also owned by OTE.