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Вікторія ГорбікThat's Life
19 November 2024, 11:32
2024-11-19
At the radio frequency auction held by NCEC today, mobile operators traded for licenses. How the lots were distributed and how much the budget will be replenished as a result
Today, the National Electronic Communications Regulatory Commission (NCEC) is holding an auction for new radio frequencies for mobile operators in the 2100/2300/2600 bands. The commission hopes that in this way the budget will be replenished by 3 billion hryvnias. A dev.ua journalist was present at the auction and was one of the first to find out who the winners were chosen by the competition committee as a result of «voice bidding».
Today, the National Electronic Communications Regulatory Commission (NCEC) is holding an auction for new radio frequencies for mobile operators in the 2100/2300/2600 bands. The commission hopes that in this way the budget will be replenished by 3 billion hryvnias. A dev.ua journalist was present at the auction and was one of the first to find out who the winners were chosen by the competition committee as a result of «voice bidding».
Mobile operators took part in the auction by the decision of the National Commission for State Regulation in the Fields of Electronic Communications, Radio Frequency Spectrum and the Provision of Postal Services (NCEC) in order to obtain additional radio frequency spectrum for the implementation of 4G to improve the capacity of their networks and the quality of communication «link»
An auction for obtaining licenses for the use of the radio frequency spectrum of 2100 MHz, 2300 MHz, 2600 MHz was held today in Kyiv, where representatives of the three largest mobile operators providing communication services in Ukraine were present.
The participants were represented by:
Oleksandr Komarov, general director of Kyivstar,
Olga Ustinova, CEO of Vodafone Ukraine,
Mykhailo Shelemba, CEO of the DVL group of companies, which includes lifecell .
On September 11, 2024, NCEC adopted a decision to grant licenses for the use of radio frequency spectrum in the radio frequency bands 1935-1950/2125-2140 MHz, 2355-2395 MHz and 2575-2610 MHz for cellular radio communication using auction procedures. The license to the winner will be issued for 15 years. Under the terms of buying frequencies at the minimum price, the state planned to receive at least UAH 3 billion.
According to the terms of the auction, bidding must be conducted by voice. Participants had to take turns to offer a price for a lot, the increase of which cannot be less than 1% of the initial bidding price. The competition commission was headed by the head of NKEK Oleksandr Zhivotovskyi. Oleksandr Zhivotovskyi asks each bidder three times about the proposed bids under the terms of the auction.
In a video message, the head of the Ministry of Statistics, Mykhailo Fedorov, thanked all operators for restoring the infrastructure and providing communications to Ukrainians.
The minimum (initial) amount of the fee for the lots was, in accordance with the order of the Cabinet of Ministers of May 10, 2024 No. 419-r «On establishing the amount of the fee for the license to use the radio frequency spectrum obtained under the terms of the competition, and the initial (minimum) amount of the license fee, obtained under the terms of the auction»:
Lot No. 1 — UAH 458,333,250: the right to obtain a license in the 1945-1950/2135-2140 MHz radio frequency bands in 25 regions of Ukraine (excluding the Autonomous Republic of Crimea and the city of Sevastopol). The initial fee for the lot is calculated as: 25 regions (regions, city of Kyiv) X 10 (width of radio frequency band) X UAH 1,833,333 (fee amount for 1 MHz of radio frequency band in each region).
Lot No. 2 — UAH 458,333,250: the right to obtain a license in the 1935-1940/2125-2130 MHz radio frequency bands in 25 regions of Ukraine (excluding the Autonomous Republic of Crimea and the city of Sevastopol). The initial fee for the lot is calculated as: 25 regions (regions, city of Kyiv) X 10 (width of radio frequency band) X UAH 1,833,333 (fee amount for 1 MHz of radio frequency band in each region).
Lot No. 3 — UAH 439,999,920: the right to obtain a license in the 1940-1945/2130-2135 MHz radio frequency bands in 24 regions of Ukraine (excluding the Autonomous Republic of Crimea, Sevastopol and Kyiv). The initial fee per lot is calculated as: 24 regions (regions) X 10 (radio frequency band width) X UAH 1,833,333 (fee amount for 1 MHz of radio frequency band in each region).
Lot No. 4 — UAH 984,860,000: the right to obtain a license in the 2355-2395 MHz radio frequency band in 25 regions of Ukraine (excluding the Autonomous Republic of Crimea and the city of Sevastopol). The initial fee per lot is calculated as: 25 regions (regions, city of Kyiv) X 40 (width of radio frequency band) X UAH 984,860 (fee amount for 1 MHz of radio frequency band in each region).
Lot No. 5 — UAH 530,005,000: the right to obtain a license in the 2575-2610 MHz radio frequency band in 25 regions of Ukraine (excluding the Autonomous Republic of Crimea and the city of Sevastopol). The initial fee per lot is calculated as: 25 regions (regions, city of Kyiv) x 35 (radio frequency band width) x UAH 605,720 (fee amount for 1 MHz of radio frequency band in each region).
The auction has restrictions for lots #1, #2 and #3 — they cannot be sold in the same hands. The same applies to lots No. 4 and No. 5.
The bidding started with lot No. 1, to which operators applied with the minimum offer:
«Kyivstar» — UAH 458,333,250.
Vodafone — UAH 458,333,500.
Both participants refused to raise offers, and the winner of this lot was the operator Vodafone with the amount of UAH 458,333,500.
All three operators applied for lot No. 2 with initial offers:
Lifecell — UAH 458,333,250.
«Kyivstar» — UAH 458,333,250.
Vodafone — UAH 458,333,500.
Lifecell increased the offer to UAH 463 million and won this lot.
«Lot #2 is the one that gives us the biggest increase in quality and bandwidth for our customers very quickly, because that 5 MHz is right next to our 15 already in place. So we at the base station can simply expand this spectrum immediately to these frequencies,» commented Mykhailo Shelemba, CEO of the DVL group of companies, which includes lifecell.
The second factor of the company’s strategy, the head of lifecell, called the increase in bandwidth without building new networks. «If we were talking about the acquisition of the 2300 MHz, 2600 MHz bands, then it would be a completely new network, new frequencies, accordingly, completely new equipment is needed, and it will take at least several years to build this network, as well as for subscribers to experience better communication, than the one that is now,» Mykhailo Shelemba added.
Operators with minimum offers applied for lot No. 3:
«Kyivstar» — UAH 439,999,920
Vodafone — UAH 440 million
lifecell — UAH 439,999,920
«Kyivstar» offered in the first round an increase to UAH 448,500,000 and won this lot with this offer. Vodafone and lifecell refused to increase their offers.
Lot No. 4 has restrictions, so companies with identical offers applied for this lot:
«Kyivstar» — UAH 984,860,000.
Vodafone — UAH 984,860,000.
«Kyivstar» raised the offer to UAH 994,800,000 and became the winner of the bidding for this lot.
«Theoretically, we could not take a step, but it seems to me that it is not very right,» Oleksandr Komarov, CEO of Kyivstar, shared with dev.ua.
According to him, the company’s primary goal was to get the 2,300 MHz and 2,600 MHz bands. «We got it. And we got it for a very reasonable price,» the manager of the mobile operator emphasized. Oleksandr Komarov noted that the auction could lead to a significant price increase. «And it is especially painful for us, because we are already investing in 2300 MHz, we have built hundreds of base stations in this range. We see how he works to improve quality. And we have very big plans for the development of this range,» Oleksandr Komarov added.
In addition, he noted that «Kyivstar» is more limited in spectrum compared to other mobile operator colleagues. «We have the largest spectrum in the country, that’s true, but we have the largest base and when we transfer this spectrum to the client, we have the biggest limitation,» he explains.
Oleksandr Komarov noted that «Kyivstar» plans to maintain a high level of investment in the network of Ukraine, as part of its commitment to invest one billion in the economy of Ukraine. 80% of this amount is investment in the company’s current telecom business, mobile and fixed communications. According to him, the company plans to make investments in the range of $200 million per year.
There are also two offers for lot No. 5:
«Kyivstar» — UAH 530,005,000.
Vodafone — UAH 530,100,000.
Because there is a limit behind this lot, which cannot fall into the same hands. Accordingly, logic says that lot No. 5 remains for Vodafone, which won this lot for UAH 530,100,000.
«We are satisfied. These are the lots we needed. And it’s really great that everyone approached (the auction — ed.) precisely from the point of view of logic, from the point of view of business cases,» said CEO of Vodafone Ukraine Olga Ustinova.
Regarding the price offered by the mobile operator, its manager commented that frequencies are not everything. «This (frequencies — ed.) is one part of the business cases that are included. We still need to build a network, buy base stations, expand the core. And this is the only business case we consider. Therefore, frequencies also have some marginal value from the point of view of economy, from the point of view of value. And we understand that when the starting price of these frequencies came out, it was already quite high from the point of view of this business case. Therefore, it was not possible to build up further. That is, you will always have a choice: either you complete the base stations themselves, or you simply add the new spectrum that you receive to the existing network,» explained Olga Ustinova.
She noted that the two bands (2,100 MHz and 2,600 MHz) acquired by Vodafone today will greatly add capacity to the operator. «We will be able to purchase LTE now because we had a temporary use of the 2100 MHz frequencies. Now we get technical neutrality — it means that we can do what we think is necessary in this spectrum, depending on the location and the need that exists in a particular network,» explained the manager.
According to her, the acquisition of the 2,600 MHz frequency is powerful for large cities, which will add a lot of capacity. «For example, during blackouts, a very large amount of traffic from the fixed business comes to mobile networks. And it seems that you have LTE, but nothing works, because the traffic has increased conditionally by 10 times. And in order to expand that to produce more capacity, we need to add 2600MHz. This will be an aggregation of all the frequencies of our portfolio,» said Olga Ustinova. Due to this, as she notes, Vodafone subscribers will feel an improvement.
«From the point of view of both the business case and the positional lots, I believe that each operator, in principle, played its strategy very well,» said the head of Vodafone Ukraine. She announced next year record investments in infrastructure, but did not name the exact amount.
According to the results of the auction, the state budget of Ukraine should be replenished by UAH 2,894,733,500:
Vodafone — UAH 988,433,500.
lifecell — 460,000,000 UAH.
«Kyivstar» — UAH 1,443,300,000.
Back in February, three Ukrainian mobile operators — «Kyivstar», Vodafone Ukraine and lifecell — declared their interest in buying licenses for an additional frequency range for 4G — in the 2.3 GHz band.
And in May, it was reported that the telecom regulator published for discussion a draft decision on the start of a tender for the sale of new radio frequencies for mobile communications. The relevant document appeared on the NCEC website.
