Another confirmation of the Havlicek fiasco: there will be no more competition in the cemented mobile phone market

Almost three years later, one thing is clear: the 5G frequency auction held in 2020 strengthened the positions of the three major operators and helped strengthen the Czech mobile market for years to come. This result can be credited to the account of the former super minister Karel Havlicek, which implemented the resulting auction model. He also helped himself by grossly interfering with the work of the Czech Telecommunications Authority (ČTÚ), which, because of him, was controlled for several years by one of the worst leaders in its history.

The infamous impact of the auction was confirmed by T-Mobil’s recent sale of 3.5 GHz frequencies auctioned by the Kaprain group. Previously, the operator PODA also got rid of its frequencies in the 3.7 GHz band. Thus, the “big three” ended up acquiring all the frequencies that the state put up for auction in 2020, with the exception of the 20 MHz block, which is still owned by Nordic Telecom. It’s not that we didn’t expect such a result in the Lupe.

Havlicek’s earlier promises that several smaller operators would appear in the 5G auction, which would increase competition in the market and drive prices down through so-called national roaming, simply turned out to be completely wrong.

Friday the 13th

The 5G frequency auction was announced for one particular company, Minister of Industry and Trade Havlicek explained in 2019 why the terms of the upcoming auction should change significantly (from the context it was clear that this was Nordic Telecom). We have information from the secret services about the non-standard course of preparation for the auction, he also claimed. Under this pretext, he removed a respected person from the post of head of the Council of the Czech Telecommunications Authority (ČTÚ). Jaromir Novak and pushed the horse into its place – obedient Hana Tovarkova. But under her leadership, the preparation of an important auction turned into a farce.

Within a few months, Tovarkova was able to move from Havlicek’s thesis that “there are no stakeholders in the 700 MHz band” to the assertion that “there are a significant number of entities that may be interested in them”, and changed the conditions so that, in the end, broadband frequencies could not be of interest to anyone but the big three network operators.

Friday the thirteenth day of Czech telecommunications has come. On November 13, 2020, ČTÚ announced the results of the auction and to the whole world, a miracle: the 700 MHz band, which could theoretically be used to build the fourth nationwide network in the Czech Republic, was divided between T-Mobile, O2 and Vodafone without much struggle and basically at the asking prices.

In the 3.5 GHz band, Nordic Telecom and Kaprain (then through the CentroNet operator) joined the big three. And thanks to the terms of the auction, a third, smaller operator, PODA, also received the right to national roaming in the O2 network.

Towels in the ring

However, immediately after the auction, Havlicek allowed his deputy to publicly praise himself for the result of the auction. Petr Ochek. Given that the media at that time wrote more about the debacle, the ministry had to order a paid article in the ChTK for these odes. Tovarkova also joined her, promising that tariffs would be reduced by at least 15-20 percent within a year.

However, negotiations on national roaming dragged on for several years without results, and suspicions that no new nationwide operator would eventually appear were reinforced by the fact that the three smaller players refused on principle to discuss the possible launch of their services (with rare exceptions).

PODA and the Kaprain holding finally gave up. At least in company Karel Prazhak it appears that it bought the frequency outright on a speculative basis, as it reportedly did not even start preparing the future network for more than two years. Nordic Telecom says nothing about its plans.

How prices have changed

And how has the market changed over this time? Recall that at the beginning of 2019, customers in the Czech Republic could purchase 500 MB of data for unlimited calls and SMS for 500 per month (without obligations), according to the price offers of major operators.

In the autumn of the same year, a big change took place: first T-Mobile, and then gradually two other network operators introduced the first tariffs with unlimited traffic. Five hundred crowns was still enough for 1.5 GB of data (plus unlimited calls and SMS), but one thousand crowns per month could already be paid for a tariff with 16 GB of data. The full unlimited offer (calls, SMS, data) without speed limit or other restrictions can be purchased for approximately CZK 1600 per month (plus fees).

Today, less than four years later, for about five hundred CZK, you can still have 500MB to 2GB of data for unlimited calls and SMS (and you can get 4GB for less than 600 CZK). Unlimited data at reduced speed starts at 900 to 1000 kr, while packages with immediate unlimited data start at just over 1300 kr per month.

KL23 Nomination Council

It can be seen that the situation is not changing with cheap tariffs, 500 packages are a relic of the past, and network operators have moved a new minimum of 600 kroons per month. For more expensive tariffs and packages with unlimited traffic, we can see an increase in GB or an increase in speed and more or less stagnant prices.

To put it simply: there has been no big shift since 2019, there will be no new competition due to the failed Havlicka (and Tovarkova) auction, and the big three are still firmly in control.

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