PTC, Polkomtel ring up GSM licenses <BR>
The special committee picked two winners from a field of three bidders, half the number originally expected. The verdict was reached more than a month before deadline.
PTC and Polkomtel will each pay ECU 101 million ($131 million) for their 15-year licenses. The two operators are expected to pay a total of ECU 520 million ($676 million) to the government by the end of the year 2000 as part of their five-year business plan to develop a nationwide mobile telephone system. Their long-term payment covers fixed fees, such as payments for telephone lines and new subscribers. Each consortium must pay the state at least ECU 80 ($104) per subscriber.
In addition, the new mobile systems are expected to pump $1 billion into peripheral businesses such as telecommunications equipment supply.
Some telecommunications experts estimate that each consortium could pay as much as $95 million a year in indirect costs for taxes on revenue, value-added tax, inter-connect costs and lease-line fees.
Neither consortium released details about which subscribers will be hooked up and when and where.
Deputy Communications Minister Andrzej Ksiezny said 1.3 million new subscribers are expected to be hooked up by the end of the decade. By the end of 1996, the consortia should cover Warsaw, Poznan and Katowice.
DeTeMobil, a member of the PTC consortium, plans to open networks in autumn and to have 500,000 subscribers by the year 2000. It says its main aim is to have investments in all economic centers of Poland.
The Global Systems Mobile digital telephone operators are counting on the potentially huge demand for cellular telephones in Poland.
"Poland, with over 38 million citizens, is the most attractive market for cellular telephones in Central and Eastern Europe," said Lothar Hunsel, president of the board of DeTeMobil.
According to recent figures, the average cellular phone in Poland is in use 380 minutes a day, compared to 180 minutes a day in Western European countries.
Overall, there are 13 telephones for every 100 Poles, a fifth the rate in Germany and France. In rural areas, the ratio drops to 4 in 100.
Lech Zdziech, managing director of ICC Millennium telecommunications consultants, said mobile telephones should bridge the gap of normal telephone service in Poland.
The tender drew only three bidders, the two winners and C-Line SA, a consortium consisting of Ciech, a chemical trader, and Italian national operator Stet. "The clearest joint-venture structure (C-Line) is the loser," Zdziech said.
As part of the tender requirements, each consortium was required to be 51% Polish-owned. The two winners comprise many different companies.
PTC's major partners are Elektrim (33%), U.S. West (23%) and DeTeMobil (23%). Other consortium members are Bank Rozwoju Eksportu, Kulczyk Holding and Elektrim Autoinvest, each with 5%, and Warta and Polpager, each with 4%.
Polkomtel is led by four partners - Petrochemia Plocka, Polska Miedz, TeleDanmark and AirTouch - each with 19% and Polish Power Grid Co., with 12%. Other consortium members are Stalexport, 6%, Weglokoks, 4%, and Tele-Energo, Bank Inicjatyw Gospodarczych and Telbank, each with 1%.
The licenses were awarded despite Ameritech's legal appeal of the whole selection process.
Ameritech contends that it and France Telecom - foreign partners in PTK Centertel - were granted the rights in 1991 to one of the GSM licenses once the 900 MHz frequency was available and without competing in a tender. Based on this agreement, Ameritech says, it and other foreign partners of Centertel invested $280 million in Poland's analog cellular network.
William J. Smilie, director of operations at Ameritech International, said on Feb. 2 that despite the awarding of the GSM licenses, Ameritech will pursue its case against the Polish government "within the framework of the international arbitration procedures of the U.S.-Poland Treaty on Trade and Economic Relations."
Smilie said awarding the tender could have broken an administrative code that prohibits administrative decisions in the face of a pending legal action.
Zdziech doubts the pending legal battle will result in the revocation of one of the GSM licenses. "From a formal point of view, licenses issued are licenses issued," he said.
Last week, Centertel sought to reassure customers and investors that its future is bright.
Centertel - which set up the Nordic Mobile Telecommunications 450 system, a first-generation analog cellular system - said that this year it will finish the last stage of building its network and introduce new services, such as improved connections. It also plans to add more than 100,000 subscribers this year.
Centertel said the GSM tender should increase capacity and, therefore, lighten the burden on Centertel. "We can paradoxically say that analog system subscribers will benefit from the introduction of GSM," the company said in a prepared statement.
"We have four years of hard work and experience in the Polish market behind us," the firm said, adding that it expects 100% coverage of Poland by year's end, except for places where it's difficult to broadcast radio waves. "A lot of time will pass before our competitors will have similar achievements."
PTC and Polkomtel will each pay ECU 101 million ($131 million) for their 15-year licenses. The two operators are expected to pay a total of ECU 520 million ($676 million) to the government by the end of the year 2000 as part of their five-year business plan to develop a nationwide mobile telephone system. Their long-term payment covers fixed fees, such as payments for telephone lines and new subscribers. Each consortium must pay the state at least ECU 80 ($104) per subscriber.
In addition, the new mobile systems are expected to pump $1 billion into peripheral businesses such as telecommunications equipment supply.
Some telecommunications experts estimate that each consortium could pay as much as $95 million a year in indirect costs for taxes on revenue, value-added tax, inter-connect costs and lease-line fees.
Neither consortium released details about which subscribers will be hooked up and when and where.
Deputy Communications Minister Andrzej Ksiezny said 1.3 million new subscribers are expected to be hooked up by the end of the decade. By the end of 1996, the consortia should cover Warsaw, Poznan and Katowice.
DeTeMobil, a member of the PTC consortium, plans to open networks in autumn and to have 500,000 subscribers by the year 2000. It says its main aim is to have investments in all economic centers of Poland.
The Global Systems Mobile digital telephone operators are counting on the potentially huge demand for cellular telephones in Poland.
"Poland, with over 38 million citizens, is the most attractive market for cellular telephones in Central and Eastern Europe," said Lothar Hunsel, president of the board of DeTeMobil.
According to recent figures, the average cellular phone in Poland is in use 380 minutes a day, compared to 180 minutes a day in Western European countries.
Overall, there are 13 telephones for every 100 Poles, a fifth the rate in Germany and France. In rural areas, the ratio drops to 4 in 100.
Lech Zdziech, managing director of ICC Millennium telecommunications consultants, said mobile telephones should bridge the gap of normal telephone service in Poland.
The tender drew only three bidders, the two winners and C-Line SA, a consortium consisting of Ciech, a chemical trader, and Italian national operator Stet. "The clearest joint-venture structure (C-Line) is the loser," Zdziech said.
As part of the tender requirements, each consortium was required to be 51% Polish-owned. The two winners comprise many different companies.
PTC's major partners are Elektrim (33%), U.S. West (23%) and DeTeMobil (23%). Other consortium members are Bank Rozwoju Eksportu, Kulczyk Holding and Elektrim Autoinvest, each with 5%, and Warta and Polpager, each with 4%.
Polkomtel is led by four partners - Petrochemia Plocka, Polska Miedz, TeleDanmark and AirTouch - each with 19% and Polish Power Grid Co., with 12%. Other consortium members are Stalexport, 6%, Weglokoks, 4%, and Tele-Energo, Bank Inicjatyw Gospodarczych and Telbank, each with 1%.
The licenses were awarded despite Ameritech's legal appeal of the whole selection process.
Ameritech contends that it and France Telecom - foreign partners in PTK Centertel - were granted the rights in 1991 to one of the GSM licenses once the 900 MHz frequency was available and without competing in a tender. Based on this agreement, Ameritech says, it and other foreign partners of Centertel invested $280 million in Poland's analog cellular network.
William J. Smilie, director of operations at Ameritech International, said on Feb. 2 that despite the awarding of the GSM licenses, Ameritech will pursue its case against the Polish government "within the framework of the international arbitration procedures of the U.S.-Poland Treaty on Trade and Economic Relations."
Smilie said awarding the tender could have broken an administrative code that prohibits administrative decisions in the face of a pending legal action.
Zdziech doubts the pending legal battle will result in the revocation of one of the GSM licenses. "From a formal point of view, licenses issued are licenses issued," he said.
Last week, Centertel sought to reassure customers and investors that its future is bright.
Centertel - which set up the Nordic Mobile Telecommunications 450 system, a first-generation analog cellular system - said that this year it will finish the last stage of building its network and introduce new services, such as improved connections. It also plans to add more than 100,000 subscribers this year.
Centertel said the GSM tender should increase capacity and, therefore, lighten the burden on Centertel. "We can paradoxically say that analog system subscribers will benefit from the introduction of GSM," the company said in a prepared statement.
"We have four years of hard work and experience in the Polish market behind us," the firm said, adding that it expects 100% coverage of Poland by year's end, except for places where it's difficult to broadcast radio waves. "A lot of time will pass before our competitors will have similar achievements."
