PTC, Polkomtel, C-Line - or none of the above?
With investment in building the network estimated to exceed $1 billion, the winners are sure to provide a windfall for equipment suppliers and investment bankers chosen to raise funds.
Perhaps the strongest consortium, players and analysts say, is Polska Telefonia Cyfrowa SA, whose major partners include Elektrim, US West, DeTeMobil and Polpager (see chart).
Where some analysts begin to disagree is over choosing a winner for the second GSM license. While C-Line (chemical trader Ciech and Italian national operator Stet) have money and political influence, they have little or no experience and limited infrastructure.
"From a technical point of view, they have nothing in their hand," said Lech Zdziech, managing director of telecom consultants ICC Millennium. "They may have a simplified (internal) structure, but they don't have any infrastructure."
The third contender - Polkomtel - on the other hand, has a head start in terms of land and lines with partners like the Polish Power Grid Company, Tel-Energo (which operates around 2,000 km of fiber optic lines connecting power stations and distributors) and Telbank (which operates a network for the banking system).
Foreign partners AirTouch, one of the world's most active cellular players, and TeleDanmark, which built the north-south fiber-optic line from Koszalin through Warsaw to Krakow, also bring a substantial amount of technical know-how to setting up a GSM network.
Strong infrastructure should help Polkomtel come out ahead of C-Line's hefty financial offer and political sway, said Justine Heys, mobile communication consultant at London-based Giga Information Group. "If these things are done the way they should be done, then they're going to be looking for technical capacities."
Some analysts speculate there may be no winner's circle at all, or only one winner.
"I have the personal impression that, on the one hand, the ministry is proceeding with the tender officially - just doing their job," said ICC Millennium's Zdziech. "But at the same time they are looking for a way to cancel the tender under a formal pretext."
The skepticism springs from what some call "the more conciliatory tone" taken by the ministry toward the demands by Ameritech and France Telecom, foreign partners in NMT 450 network operator Centertel, that the government assign them one of the GSM licenses without Centertel's bidding in the competitive tender.
The two companies (first Ameritech, later France Telecom) have now announced their intent to take the dispute to international arbitration and are claiming around $500 million each in damages. Most analysts say that France Telecom's announcement the day before bids were filed - that they would join Ameritech in fighting for the license - was key.
"The decision of France Telecom to join in the complaint has increased the pressure by 200%," said Zdziech. "Before it was just an American problem - now it's international."
While neither side has a clear-cut case, the chance that France Telecom and Ameritech might win and perhaps the political pressure from a European, state-owned company seems to be enough now for the ministry to look for a quiet resolution as opposed to the hard line previously taken.
Communications Minister Andrzej Zielinski said earlier in the month that the ministry had a proposal that could appease the foreign partners, showing a new willingness to compromise. Statements like these, combined with rumors that the ministry could disqualify one or more of the participants on technical grounds, led some to think the government was considering annulling the tender.
At press time, Communications Ministry Spokesman Marek Malinowski said that no official decision had been taken and the selection committee's work had been slowed as several members had come down with the flu. He added that the bidders' eligibility would be determined within days.
But what some of the bidders consider a more likely solution is that the ministry will offer Centertel a digital DCS 1800 license. While Ameritech and France Telecom previously said it was too early for a DCS system (used almost exclusively in cities) to prove profitable, Paul Wolters, managing director of DeTeMobil's Warsaw branch, said that the ministry could make that network interesting for Centertel. "I still think that with a few changes to the conditions under which they would get the license, the Centertel partners might be satisfied with DCS," Wolters said. "If Centertel got the license quickly, they might actually have a chance (to make it feasible).
"Of course, the other option is just to withdraw the tender - but then they would have many more companies against them ... Looking at the political set of targets of the ministry, I would say they would rather just get on with it."
GSM: the bidders
Polska Telefonia Cyfrowa SA
Elektrim 33%
DeTeMobil 23%
US West 23%
Bank Rozwoju Eksportu 5%
Kulczyk Holding 5%
Elektrim Autoinvest 5%
Warta 4%
Polpager 4%
Polkomtel SA
Petrochemia Plocka 19%
Polska Miedz 19%
TeleDanmark 19%
AirTouch 19%
Polish Power Grid Company 12%
Stalexport 6%
Weglokoks 4%
Tele-Energo 1%
Bank Inicjatyw Gospodarczych 1%
Telbank 1%
C-Line SA
Ciech 51%
Stet 49%
Perhaps the strongest consortium, players and analysts say, is Polska Telefonia Cyfrowa SA, whose major partners include Elektrim, US West, DeTeMobil and Polpager (see chart).
Where some analysts begin to disagree is over choosing a winner for the second GSM license. While C-Line (chemical trader Ciech and Italian national operator Stet) have money and political influence, they have little or no experience and limited infrastructure.
"From a technical point of view, they have nothing in their hand," said Lech Zdziech, managing director of telecom consultants ICC Millennium. "They may have a simplified (internal) structure, but they don't have any infrastructure."
The third contender - Polkomtel - on the other hand, has a head start in terms of land and lines with partners like the Polish Power Grid Company, Tel-Energo (which operates around 2,000 km of fiber optic lines connecting power stations and distributors) and Telbank (which operates a network for the banking system).
Foreign partners AirTouch, one of the world's most active cellular players, and TeleDanmark, which built the north-south fiber-optic line from Koszalin through Warsaw to Krakow, also bring a substantial amount of technical know-how to setting up a GSM network.
Strong infrastructure should help Polkomtel come out ahead of C-Line's hefty financial offer and political sway, said Justine Heys, mobile communication consultant at London-based Giga Information Group. "If these things are done the way they should be done, then they're going to be looking for technical capacities."
Some analysts speculate there may be no winner's circle at all, or only one winner.
"I have the personal impression that, on the one hand, the ministry is proceeding with the tender officially - just doing their job," said ICC Millennium's Zdziech. "But at the same time they are looking for a way to cancel the tender under a formal pretext."
The skepticism springs from what some call "the more conciliatory tone" taken by the ministry toward the demands by Ameritech and France Telecom, foreign partners in NMT 450 network operator Centertel, that the government assign them one of the GSM licenses without Centertel's bidding in the competitive tender.
The two companies (first Ameritech, later France Telecom) have now announced their intent to take the dispute to international arbitration and are claiming around $500 million each in damages. Most analysts say that France Telecom's announcement the day before bids were filed - that they would join Ameritech in fighting for the license - was key.
"The decision of France Telecom to join in the complaint has increased the pressure by 200%," said Zdziech. "Before it was just an American problem - now it's international."
While neither side has a clear-cut case, the chance that France Telecom and Ameritech might win and perhaps the political pressure from a European, state-owned company seems to be enough now for the ministry to look for a quiet resolution as opposed to the hard line previously taken.
Communications Minister Andrzej Zielinski said earlier in the month that the ministry had a proposal that could appease the foreign partners, showing a new willingness to compromise. Statements like these, combined with rumors that the ministry could disqualify one or more of the participants on technical grounds, led some to think the government was considering annulling the tender.
At press time, Communications Ministry Spokesman Marek Malinowski said that no official decision had been taken and the selection committee's work had been slowed as several members had come down with the flu. He added that the bidders' eligibility would be determined within days.
But what some of the bidders consider a more likely solution is that the ministry will offer Centertel a digital DCS 1800 license. While Ameritech and France Telecom previously said it was too early for a DCS system (used almost exclusively in cities) to prove profitable, Paul Wolters, managing director of DeTeMobil's Warsaw branch, said that the ministry could make that network interesting for Centertel. "I still think that with a few changes to the conditions under which they would get the license, the Centertel partners might be satisfied with DCS," Wolters said. "If Centertel got the license quickly, they might actually have a chance (to make it feasible).
"Of course, the other option is just to withdraw the tender - but then they would have many more companies against them ... Looking at the political set of targets of the ministry, I would say they would rather just get on with it."
GSM: the bidders
Polska Telefonia Cyfrowa SA
Elektrim 33%
DeTeMobil 23%
US West 23%
Bank Rozwoju Eksportu 5%
Kulczyk Holding 5%
Elektrim Autoinvest 5%
Warta 4%
Polpager 4%
Polkomtel SA
Petrochemia Plocka 19%
Polska Miedz 19%
TeleDanmark 19%
AirTouch 19%
Polish Power Grid Company 12%
Stalexport 6%
Weglokoks 4%
Tele-Energo 1%
Bank Inicjatyw Gospodarczych 1%
Telbank 1%
C-Line SA
Ciech 51%
Stet 49%
