Winner of 3G licence
Government and public discussions on introducing third-generation (3G) mobile technology in Albania started in 2009. The three telecommunication companies operating in Albania at that time, as well as the fourth company which joined the market later, displayed a keen interest in the issue. In August 2010 the government released the relevant tender documents, thus announcing its intention to issue a single 3G licence and exclude the other three operators. In September 2010 the four Albanian mobile networks jointly issued a statement calling on the government to review its plans to issue only one 3G licence and instead give all the networks the chance to embrace the new technology. The operators felt that allowing only one operator to offer 3G would distort the market by creating a monopoly: "The limitation of issuing a single licence through a public tender could endanger the process and create a monopoly in the Albanian market." The operators noted that a competitive 3G market would speed up coverage deployment and bring benefits to customers. In addition, they argued that the proposed price for the single licence was excessive: the government had set a minimum price for the single licence of €12.5 million. The operators proposed that the government issue all of them with licences for a lower cost. However, the government rejected these proposals and opted for a single 3G licence. Following the tender process, the licence was awarded to Vodafone Albania for €31.4 million.
On August 20 2010 the Communication and Information Office of the Council of Ministers announced that Genc Pollo, the minister responsible for electronic communications, had approved proposals by the Electronic and Postal Communications Authority (AKEP) to open up the market for 3G licences. At the time, Pollo affirmed that the use of 3G technology would raise the quality of data transmission between mobile phones and increase internet use. On August 20 AKEP, as the electronic communications regulatory body in Albania,(1) in accordance with Article 69 of the Law on Electronic Communications and the Council of Ministers Decision on the Approval of Regulations for the Development of the Public Tender for Granting the Right to Use Frequencies (1252/2008, amended), declared the tender open and released the approved tender document.(2) The object of the tender was to grant one right to use frequencies in the 1920-1935 megahertz (MHz) band paired with 2110-2125 MHz and 1900-1905 MHz unpaired spectrum offering broadband services.
The bid laid down four general requirements for qualification:
- Professional qualification – bidders had to prove that they had professional knowledge about and experience of the use of frequencies and technologies operating in the Global System for Mobile Communications (GSM) bands, Universal Mobile Telecommunications System bands and/or broadband wireless access bands.
- Technical skills – bidders were to submit their plans and diagrams for the extension and configuration of the network to be built. In addition, bidders had to guarantee the use of frequencies in line with the recommendations and standards of the International Telecommunication Union and the European Conference of Postal and Telecommunications Administrations.
- Economic and financial situation – bidders had to prove that they had the financial and economic capacities to fulfil their individual authorisation obligations through:
- bank statements issued by one or more banks about the financial situation of the bidder, which guaranteed the fulfilment by the bidder of obligations deriving from the obtainment of individual authorisation. If this requirement was not fulfilled, the bidder would be disqualified;
- financial statements (eg, balance sheet, statements, incomes, expenses) or separate parts of these financial statements for one of the past three financial years. Bidders which started the activity during the ongoing financial year were excluded from this obligation; and
- a statement of the overall turnover of the company realised from similar activities during one of the past three financial years.
- Legal capacities – bidders had to prove that they had the legal capacity to fulfil obligations deriving from the individual authorisation by submitting the certificate of registration as a commercial entity issued by the authorised body (the National Registration Centre for Domestic Bidders).
The criteria for the evaluation of the bids were:
- the bid price (0-90 points); and
- the period of coverage with service on a geographical scale (0-10 points).
The bid with the highest price would receive 90 points and each bidder which submitted in its bid a service coverage plan on a geographical scale in compliance with requirements would receive 10 points. The minimum acceptable price for the bidders was €12.5 million.
Bids had to be submitted by no later than November 8 2010 and were opened the same day. The tender documents provided that a bid could be submitted by a group of investors which would cooperate for tender participation purposes and which intended to carry out transactions through a consortium, but no such consortium presented a bid. In fact, only two companies submitted bids to AKEP: Vodafone Albania and Eagle Mobile. The two other telecommunications companies operating in the local market – Albanian Mobile Communications and PLUS Communications – did not participate in the tender, as previously announced in their public objection. The two presented bids were very different: Eagle Mobile offered €12.559 million and Vodafone Albania offered €31.4 million. Vodafone Albania won the tender and is now the only telecommunications company offering 3G technology in Albania. Within 10 days of the announcement of the winner and the disbursement of all due payments, AKEP granted Vodafone Albania an individual authorisation valid for a period of 15 years, with the option to renew at the end of that period.
Vodafone Albania has now launched the country's first 3G network, with coverage initially available in the capital city Tirana and its suburbs. By beginning 3G operations in Tirana, Vodafone Albania can offer internet speeds of up to 14.4 megabytes per second. 3G services will be extended to all current and new Vodafone customers across the country within 18 months, and will cover the most populated areas by the end of Summer 2011.
Vodafone Albania has awarded a four-year 3G network expansion contract to Nokia Siemens Networks, under which Nokia will also provide consulting, civil works support, network planning and optimisation, training and maintenance services. In addition, Nokia will replace the existing GSM radio network provided by Vodafone Albania's previous radio network vendor.
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]).