Fat cats line up for the UMTS check

   This week the Communications Ministry issued a document with the price requirements and evaluation criteria for the bidders for the five UMTS licenses. And with Communications Minister Tomasz Szyszko sticking to his minimum price of o750 million for each license, prospective bidders are continuing to cry foul over what they consider to be governmental gouging.

   Mesmerized by the billions of euros that have fattened national treasuries in Western Europe, the Polish government wants to ensure that it receives more than its fair share of the UMTS jackpot. It's no surprise. The government decided months before scheduling the tender that it expected a total of zl. 14 billion ($3.3 million) for the licenses it would award, even going so far as to add the money to the federal budgets for the next two years.

   In hopes of increasing the fees, Szyszko intentionally opened the gates to a Trojan horse by deciding to grant five UMTS licenses in a market where there is just about enough room for four mobile-internet service providers. The four most qualified candidates for the licenses – mobile operators Polska Telefonia Cyfrowa (Era), PTK Centertel (Idea) and Polkomtel (Plus) along with fixed-line telephone operator Netia – have already confirmed their participation in the tender.

   Clearly, the government intends to drive up the price as high as possible by welcoming to the playing field a big international telecom with fat cash reserves, which will force the other bidders to up their ante. Szyszko says that some of the biggest European, American and Japanese companies are now eyeing up the fifth license. Realistically, though, there's no room for five UMTS operators in a country of 39 million people, where roughly 5 million use mobile phones. To make matters worse for the three GSM operators, the ministry issued a regulation requiring them to make their mobile networks available to the fifth UMTS license winner if the company is not already present in Poland.

   While the UMTS tender will fatten the federal coffers regardless of the final prices paid for the licenses, it also will be a last hurrah for the Communications Ministry. The cash windfall will no doubt permit Szyszko and his cohorts to go out with a bang since the new telecommunications law, which takes effect Jan. 1, 2001, will disband his office and replace it with an "independent" regulatory body. The tender's financial success may even guarantee Szyszko and company cozy reappointments in other ministries.