T-Mobile, P4 win Polish tender to offer faster Web services

, Bloomberg

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Deutsche Telekom's local unit and P4 Sp. z o.o., Poland's third- and fourth-largest mobile-phone operators, won a tender to buy 1,800 MHz frequencies and offer faster wireless services in the country.

Polska Telefonia Cyfrowa, which operates under the T-Mobile brand name, will pay $147 million for two frequency bands, while P4 offered $161 million for three bands, Magdalena Gaj, Poland's phone regulator, said at a press conference in Warsaw today.

Faster networks are key for carriers as consumers flock to smart phones such as Apple's iPhone and handsets based on Google's Android system to download music, watch videos online and surf the Web. The Polish companies will build LTE, or long-term evolution, Internet and compete with billionaire Zygmunt Solorz-Zak's Polkomtel Sp. z o.o., the only operator currently offering such services in Poland.

"As a result of the tender it won't take more than 12 months for new players to emerge on the high-speed Internet market," the regulator said in the statement.

The winners have seven days to confirm their plans to buy frequencies, Gaj said. Key for the regulator was to boost competition while deciding who will buy the frequencies.

Poland will also offer spectrum in two separate frequency bands of 800 MHz and 2,600 MHz later this year. The offered price will be the main criterion at these auctions, Gaj said in September. The government may raise $42 million to $1.3 billion from the sale of the 800 MHz frequency, according to the Ministry of Administration and Digitization's website.

Telekomunikacja Polska, Poland's biggest phone company and a unit of France Telecom, failed to buy frequencies at the tender after offering a total of $90 million for 2 bands, Gaj said. The company, whose bids came sixth and seventh, and the Deutsche Telekom unit have an agreement to share mobile-phone network in Poland.

"Telekomunikacja can't afford to give up on LTE," Przemyslaw Sawala-Uryasz, an analyst at UniCredit SpA, said by phone today. "They might place a stronger bid for 800 MHz," which is "more important" as it allows to "cover bigger areas with fewer towers."

Telekomunikacja fell 28 percent in Warsaw on Tuesday as it cut its 2012 dividend plan, citing payments for new frequencies as one of the reasons. The company estimates it will spend $32 million to $65 million to buy new frequencies.

P4, owned by Thor Bjorgolfsson's Novator and Tollerton fund, is the smallest and latest entrant of the four operators with 7.8 million customers.

Telekomunikacja is the first alternate for a 1800 MHz band and will purchase one if P4 or Polska Telefonia don't buy, its spokesman Wojciech Jabczynski said in a statement posted on the company's website. The company's priority is to win 800 MHz and 2,600 MHz frequencies later this year, he said.

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