HAKOM opens bids for remaining “digital dividend”

ZAGREB, 28 October 2013 – At the public opening of the bids in the radiofrequency spectrum auction, HAKOM has opened two received bids for the remaining “digital dividend” of a total of 20 MHz, which are currently not allocated. The bids were submitted by VIPnet and Hrvatski Telekom. VIPnet has offered HRK 110,144,999 for the frequency block A (801-806/842-847 MHz), while HT’s bid amounts to HRK 105,110,000. Only HT submitted its bid for the frequency block B (806-811/847-852 MHz), and the offered amount was HRK 105,652,000. HAKOM’s final decision on the award of licences is expected in the first half of November, after the analysis and verification of the tender documentation is carried out. The highest offered price at the auction was the criterion for the bid selection per frequency block.

Two frequency blocks, 2x5 MHz each, were offered at the auction. They shall be used for the provision of communication services based on the “Long-term Evolution” (LTE) technology, with a one-off fee per block of a minimum of HRK 105 million, for which operators submitted their bids. In addition to the one-off fee, operators could also opt between paying the total amount of annual fees for the use of radio frequency immediately, or in equal annual instalments, until the license expiry in 2024. VIPnet opted for the total payment of the annual fees for the use of the radio frequency spectrum in the amount of HRK 65 million, while HT would pay HRK 8 million over the next 11 years. In the event of the allocation of block A to VIPnet and block B to Hrvatski Telekom, which can be expected at the beginning of next month, the state budget would gain unplanned revenue of almost HRK 290 million. Total state budget revenue from fees for the use of the radio frequency spectrum for the overall “digital dividend” area, until the expiry of licenses in 2024, will amount to over one billion Croatian kuna.

It is worth mentioning that at the end of last year, HAKOM published a public call for the allocation of the overall available radio frequency spectrum of the “digital dividend” to the interested operators of mobile communication networks, 60 MHz between 791 MHz and 862 MHz, distributed in three identical blocks of 2 x 10 MHz. Hrvatski Telekom and VIPnet responded to the call, while Tele2 did not express interest. As a result, HAKOM awarded a total of 40 MHz at the public call to the two largest operators, and the third frequency block of 2 x 10 MHz each remained unallocated. On this occasion, the state earned direct revenue of HRK 332 million. An additional HRK 352 million will be paid in the form of annual fees on the license expiry in 2024. By the allocation of the entire “digital dividend”, in addition to the funds collected by the government on the basis of the licenses issued, an increase in the investment in mobile communications networks broadband infrastructure is also expected. The “digital dividend” frequency area is suitable for the coverage of large areas with a smaller population density, which can significantly decrease the gap between the developed urban and underdeveloped rural areas with regard to the broadband connections density, which is one of the objectives not only of the European Union (“Digital Agenda 2020”), but also of the national broadband access programme.
 

HAKOM (www.hakom.hr) – Croatian Post and Electronic Communications Agency – ensures preconditions for a fair market competition, stable growth and environment for innovations in the electronic communications and postal services market. HAKOM protects users’ interests and the possibility of choice among various communications and postal services at affordable prices, defines sustainable competitive conditions for operators and service providers under fair conditions for return on investment, and provides support to economic growth, public services and the quality of life in the Republic of Croatia by using modern technologies. HAKOM’ strategic goals are: to promote regulation of the electronic communications and postal services market, to support growth of investments and innovations in the electronic communications and postal services market, to provide efficient use of limited resources, to accelerate the growth of broadband products and services, to provide affordable offers of communications and postal services, to provide protection and informing of users, to build an efficient and comprehensive information system, to define and implement efficient processes, and to acquire multi-disciplinary competencies in market regulation.