State picks UMTS tender participants

  • 2003-05-01
  • Aleksei Gunter

Mobile phone networks of the next generation moved one step closer to the Baltics last week as Estonia's National Communication Board offered the three largest mobile communication operators to buy UMTS licenses on more favorable conditions.

The communication board proposed a UMTS license for 70 million kroons (4.47 million euros) to EMT, Radiolinja Eesti and Tele2 Eesti to acquire UMTS, or Universal Mobile Telecommunications System - also known as 3G - is the next generation of mobile communications that facilitates extended multimedia services and faster data transfer.

Unlike their colleagues in other European countries, Estonian authorities decided not to carry out a usual auction and instead made a direct offer to the three major operators that have at least two years of experience offering GSM services on the local market.

The National Communication Board is to issue four UMTS licenses in all. The fourth is to be auctioned after the three preferred companies announce their decisions.

According to the rules, the three companies qualifying for the first round have the right to buy the UMTS license at the initial price.

However, none of them appears willing to pay the 70 million kroons necessary.

Kaja Pino, spokeswoman for EMT, said the company had only just received information from state officials, and no decisions have been taken so far on participation in the tender.

"We have previously stated that the initial price set by the Estonian National Communication Board is too high, and that four 3G licenses for one small Estonia is too many," said Pino.

Pino said that EMT would wait until the official conditions of the tender are published before deciding.

EMT previously stated that a UMTS network in Estonia would cost up to 2 billion kroons to develop, and that the company's investments into 3G network construction in 2003 would amount to 200 million kroons.

Both Radiolinja Eesti and Tele2 Eesti announced last week they would need more information to decide whether to go for a UMTS license at that offered price.

Ave Reinson, press officer for the Estonian National Communication Board, said the official conditions of the UMTS contest would most probably be published on May 8 in the state's publication.

"We have received positive feedback from the mobile-communication companies. They are interested in details of the contest," she said.

"The licenses that remain unsold after the first round of the contest will be auctioned in the second. However, the initial price of the second round will also be 70 million kroons," explained Reinson.