Telefonica wins Slovakia's third mobile-phone license

The regulator viewed „the contribution to boosting competition” on the market as the main criteria in evaluating the bids, Roman Vavro, the spokesman for Slovakia's telecommunications regulator, said in an e-mailed release today. The company offered 150 million Slovakian koruna ($5 million) for the license through its Telefonica O2 Czech Republic AS unit. The regulator expects the entry of a third mobile-phone company to increase competition in Slovakia, where about 85% of its 5.4 million people use cellular phones. The Slovak wireless market is currently divided between France Telecom SA's Orange phone unit and Deutsche Telekom AG's T-Mobile. „Telefonica doesn't have many growth opportunities on the Czech market, so it is logical that it's looking for them elsewhere,” said Petr Bartek, an analyst at Cyrrus AS, a brokerage based in Brno, the Czech Republic. Vavro didn't elaborate on the details of Telefonica's bid for the 20-year license, which allows the company to offer faster so-called third-generation services as well as run a global system for mobile communications network.
Telefonica 02 owns 69% of the Czech unit. The offer by Telekom Austria AG, the largest phone company in Austria, was judged as the second best, while a bid by Radiokomunikace AS, the Czech Republic's second-biggest phone company, ranked third, Vavro said. Telekom Austria will „stick” to its plan to expand in eastern Europe, spokeswoman Elisabeth Mattes said in an e-mailed statement. The company is keen on buying a mobile-phone company in Bosnia and wants to bid for a cellular license in Serbia. Cyrrus's Bartek said the victory in the tender may cause the stock price for Telefonica's Czech unit to fall because of the expected spending to build the network in Slovakia. „The company will need to make big investments in Slovakia and this will probably hurt its dividends, whose growth has been the main force in driving the shares up,” he said. (Bloomberg)