AMC wins 3G licence
End of 3G monopoly?
In June 2011 the Albanian Authority for Electronic and Postal Communications (AKEP) announced that it would open a tender for a second third-generation (3G) licence in September 2011. The first 3G licence was awarded to Vodafone Albania in November 2010.
During the award of the first 3G licence, the decision to award only one licence was much discussed, with opponents arguing that it would create a monopoly and that all mobile operators in Albania should have had the opportunity to hold a 3G licence, rather than having to compete for the right to a licence. AKEP was one of the institutions that argued in favour of a non-monopolistic 3G market. In addition, the World Bank, when presenting its economic growth strategy for Albania, proposed the liberalisation of the 3G market.
When AKEP announced the tender for the second 3G licence, it stated that the minimum bid price would be €12.5 million. All three mobile communications companies without a 3G licence (Albanian Mobile Communications (AMC), Eagle Mobile and Plus Communication) were invited to compete. The relevant documentation had to be send to AKEP by September 5 2011, and the winning bidder would be the company which submitted the highest bid. Of the 100 points available to each bid, the offer's value was worth up to 90 points and the coverage time was worth only 10 points.
The government intended to prioritise the liberalisation of the market through the tender, but the mobile operators have again argued that the only way to achieve true 3G market liberalisation would be to give every mobile operator the right to a 3G licence. As with the tender process for the first 3G licence, the operators also argued that a minimum bid price of €12.5 million was too high for the Albanian market.
The tender for the second 3G licence came less than one year after the award of the first 3G licence to Vodafone Albania following its offer of €31.4 million. Although during the first tender in 2010 many critics argued against a monopoly and a high bid price, quite a few emphasised that Vodafone Albania should have been able to enjoy its monopoly for a longer time given the high price that it paid for the licence. To some, the opening of a second 3G licence tender in September 2011 seemed premature.
Plus Communication, a mobile operator owned by a consortium of Albanian businesses, did not participate in the bid. Thus, the tender process was between two operators: AMC, the majority of which is owned by Greek Cosmote, part of Deutsche Telecom Group; and Eagle Mobile, which is owned by Turkish group Çalik Holding. AMC made an offer of €15.1 million, significantly higher than the minimum value, while Eagle Mobile made an offer of €12.9 million. Thus, on September 16 2011 AKEP Chairmen Pirro Xhixho announced that the second 3G licence had been won by AMC.
Vodafone Albania has been the sole provider of 3G networks in Albania since it launched its 3G service on January 10 2011. According to Cosmote Greece, AMC's parent company, as of March 2011 Vodafone Albania led the Albanian telecommunications market with 2 million customers. However, AMC now hopes to shift the balance of power away from Vodafone Albania.
Although a second 3G licence has been awarded, making the government's intent to liberalise the market clear, mobile operators continue to oppose the path chosen by the government. In an official statement, Plus Communication Chief Executive Officer Moni Buchnik said that a second licence does not fight the monopoly, but rather intensifies the problem, creating an oligopoly and putting the two remaining operators at a disadvantage. He urged the Albanian authorities to open the other two 3G tenders quickly and to both remaining mobile operators at the same time, and at a reasonable price, in order to achieve full market liberalisation.
For further information on this topic please contact Ajola Xoxa at Tonucci & Partners by telephone (+355 4 2250 711/2), fax (+355 4 2250 713) or email ([email protected]).