Polkomtel will not participate in further bidding for 800 MHz spectrum blocks - statement

10 Mar 2015

Polkomtel decided to discontinue active participation in the auction, in the part related to the 800 MHz spectrum blocks, and switched to a passive bidding mode. The company concluded that this will create an opportunity for realization of a positive auction scenario for the entire market and for customers.

Polkomtel has unchangeably been of the opinion that the best way of using the spectrum from the 800 MHz band is to establish one network with 30 MHz of spectrum, or two equivalent networks, each having 15 MHz of spectrum. Similar position has been also demonstrated by the President of the Office of Electronic Communications (UKE) who introduced amendments to the auction documentation. Analogous view, regarding the necessity of construct one, or maximum two networks, was demonstrated by experts and telecommunication market analysts, as well as by entrepreneurs’ organizations.

The auctions course to-date shows that it may yield negative outcome. Instead of a positive result, and creation of one or two equivalent networks, there may emerge a state of market imbalance and distortion of competition. Similar opinions was expressed by Ms. Anna Strężyńska, the former UKE President, in an article published by Rzeczpospolita daily.

Thus scenarios could materialize which would be unfavorable for the market and for customers. One of them is a situation where Orange and T-Mobile, which cooperated together, will purchase 10 MHz of bandwidth each and built a network relying on 20 MHz. The remaining operators, holding only 10 MHz of bandwidth, will then have no chances of competing against a network offering two times faster data transfer.

A scenario is also probable in accordance with which three LTE networks will be built. T-Mobile and Orange, who have joint, shared infrastructure, can strive to eliminate Polkomtel-Midas group from roll-out of a joint 800 MHz network and leave the group with the Sferia contract, which offers only one 5 MHz block of spectrum. In such a case Orange would take 10 MHz, while the other network would be established by T-Mobile and Play, with 15 MHz of spectrum. The factor pointing to such a solution is the existing cooperation between T-Mobile and Play (the national roaming agreement) and the fact that Play has no infrastructure outside cities. This gives grounds for presumption that Play will be interested in offering access to the 800 MHz spectrum obtained in the course of the auction in return for discounts on the gigabytes purchased from T-Mobile. Both of these networks would then be created on a joint infrastructure of Orange and T-Mobile.

Polkomtel’s requests, asking UKE to examine, ex officio,  the principles of cooperation between Orange and T-Mobile, as well as the regulation of the spectrum market, were answered by UKE only after a year. In its response UKE informed that the regulation is carried out by UKE President ex officio (without informing whether and when the regulator intends to carry it out). Moreover, UKE President declared several times that she would not permit a solution leading to unequal distribution of bandwidth from 800 MHz spectrum among the networks and she assured that she will deal with spectrum market regulation after the auction ends. While acting in good faith, Polkomtel accepts these assurances and counts on their fulfillment.

Polkomtel is of the opinion that cooperation between operators is the best solution for the market and for customers and counts on the auction finally leading to emergence of one or two equivalent LTE networks. However, Polkomtel does not want to participate in fulfillment of scenarios which could frustrate the chance of assuring a competitive balance. Polkomtel has decided to move to passive bidding and thus to create an opportunity for other operators to bring about a situation in which it will become possible to offer high speed Internet access to Poles - at best by one, joint LTE network.

Polkomtel – thanks to the agreement with Midas Group – will have access to spectrum from 800 MHz bandwidth. This can be concluded from the information published by Midas Group regarding the right to buy, for its own use or for its customers, telecommunication services provided by Sferia in LTE technology in the 800 MHz band (Sferia holds a spectrum reservation for a 5 MHz block in 800 MHz frequency band which was granted to it by virtue of UKE President’s decision). LTE 800 MHz network is already being rolled out by Midas Group, who announced that in the first phase it plans to put on air around 1200 base stations, while to achieve optimum LTE800 network coverage it can built and put on-air over 5000 stations in total.

Polkomtel would like to declare clearly that is ready to cooperate on peer-based and non-discriminatory principles with all the parties who will acquire spectrum in 800 MHz band. Thus, Polkomtel would like to invite future holders of 800 MHz band, including in particular P4 Sp. z o.o., NetNet Sp. z o.o. and Hubb Investments (Emitel group), to cooperate in the roll-out of a network using 15 MHz of bandwidth together with Midas Group.

Last updated 03/12/2015