Three Bids for Third Slovak Mobile Licence

mobilkom Austria, which has assets in Austria, Bulgaria, Croatia and Slovenia, and Czech provider Radiokomunikace are two of the three players to have bid for Slovakia's third mobile licence. The deadline for the bidding for the 20-year licence for frequencies in the GSM 900, GSM 1800, UMTS and FS 29 frequency bands was Friday (14 July 2006). The minimum starting price for the bids was 100 million koruna (US$3.4 million). The bidders will also need to fulfil other requirements relating to the respective bidders' experience and technical capabilities, as well as their conformance to Slovak law.

Outlook and Implications

• Competition to Orange and T-Mobile: At present, the market is a duopoly of the France Telecom-owned Orange Slovensko and T-Mobile Slovakia, which, like the fixed-line incumbent Slovak Telecom, is controlled by Deutsche Telekom. Both operators, Orange Slovensko and T-Mobile Slovensko, offer EDGE-based and 3G services, having launched W-CDMA networks in March 2006 and January 2006 respectively. Both operators are investing in 3G network expansion: by end-2006, Orange Slovensko plans to cover 43.3% of the Slovak population with its W-CDMA network. As of the first quarter of 2006, non-voice services accounted for 15% of ARPU at T-Mobile Slovakia.
  
  
• More Competition to Come: The Slovak market also has yet to feel the full impact of mobile number portability (MNP), as well as the introduction of MVNOs. MNP was recently introduced and will aid the prospects of a new entrant. The intensification of competition via new entry of a third network operator, number portability and eventually MVNOs could have the impact of lowering voice ARPU and increasing churn rates – trends that have occurred in other markets. The new entrants may also seek entry into other segments of the Slovak telecoms market in order to provide multiple services to end-users.