Telenet and Tecteo win mobile licences

Belgian cable operators Telenet and Tecteo have submitted a formal joint bid for the country’s fourth 3G-licence, which was put up for auction by the BIPT (Belgian Institute for Postal and Telecommunication Services) on March 15, 2011.

The licence will provide access to spectrum in the 900 MHz and 1800 MHz bands. Given the fact that the special JV formed for the licence, Telenet Tecteo Bidco NV has been confirmed as the sole admissible candidate for the available frequency spectrum, the total consideration paid being equal to the minimum reserve price as set by the BIPT.

Telenet said that the joint bid to acquire mobile spectrum shows the company’s commitment to invest in order to further improve the competiveness of the Belgian telecoms market and to deliver better quality at lower prices for consumers.

Telenet Tecteo Bidco NV refers to the consortium between Telenet Group Holding NV and Tecteo (operating under the brand name VOO in Wallonia) with regards to the joint acquisition of mobile frequency spectrum and the joint operating thereof.

Telenet believes it is ideally positioned to benefit from the anticipated growth in mobile data. At present, mobile broadband penetration in Belgium continues to strongly lag the European average because of low smartphone penetration and lack of intense mobile data competition between the existing mobile network operators.

Having entered the mobile market in 2006 as an MVNO, Telenet has succeeded in growing its subscriber base to over 210,000 active mobile subscribers at the end of March 2011.

The JV seeks to acquire the maximum available block of 2 x 14.8 MHz 3G?spectrum in the 2.1 GHz band. The total consideration paid will amount to €71.5 million in aggregate for both Telenet and Tecteo and will be paid by annual installments over the lifetime of the licence. Like the three 3G licences awarded by the Belgian Government in 2001, the fourth 3G licence will expire on March 15, 2021.

At the same time, Telenet Tecteo Bidco NV will exercise its call option on the valuable 2G spectrum in the 900 MHz and 1800 MHz bands, which will become available as of November 27, 2015. Telenet Tecteo Bidco NV seeks to secure 2 x 4.8 MHz in the 900 MHz band and 2 x 10 MHz in the 1800 MHz band for an aggregate amount of €31.5 million for both Telenet and Tecteo and will be paid by annual installments over the lifetime of the licence.

The acquired 2G license will expire simultaneously with the 3G licence on March 15, 2021. Usage rights in the 900 MHz, 1800 MHz and 2100 MHz bands are technology neutral and will allow for the rollout of high speed mobile data networks such as LTE.

Telenet said it will now look at all available options to operate its frequencies at maximum capital efficiency,
leveraging as much as possible on existing infrastructure assets and seeking a more intense collaboration with the existing Belgian mobile network operators through mutual value accretive partnerships.