Latvia's Public Utilities Regulatory Commission (SPRK in Latvian) has issued a statement calling a recent survey of the potential market for its "third" GSM/UMTS mobile operator licence vague and unprofessional. Essentially, the SPRK said it cannot undertake organizing a licence auction based on the survey done by Ticon, which found that there was general, conditional interest in the auction by a number of foreign and Latvian companies. The regulator said it could not design an auction based on this data, which the agency said gave no specific recommendations for the pre-conditions for such a sale.
The statement is a signal of an ongoing, underlying conflict between the cautious regulator and the Ministry of Transport, which seems determined to hold an auction by the end of the year. Sources at the Ministry's Communications Department told this blogger that the regulator was foot dragging and dodging its responsibility to conduct the auction with due speed.
The regulator, however, seems determined not to repeat the disastrous attempt at a third-licence auction in 2002, when both incumbents, LMT and Tele2, bought UMTS licences for a fixed price of LVL 5.8 million, but no one showed up for the "real" auction of the third licence. However, the starting price for the current licence has been indicated at around LVL 500 000.
The controversial statement by the SPRK came on the same day as CDMA-450 operator Triatel was scheduled to start operations as Latvia's de-facto third mobile operator, offering 3G services. The incumbents, whose expensive licences required that they start UMTS operations by year end, have yet to announce the start of this service.
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