Ready, steady, wait: How Poland's LTE auction fell apart before it even got started

Whether you put it down to late paperwork or parliamentary protests, the country's LTE auction has faltered on the starting blocks - and it looks like everyone thinks that's a good thing.

Originally, yesterday was supposed to be deadline day for the Polish mobile networks to begin bidding on 19 blocks of LTE-compatible spectrum: five in the 800MHz band, and 14 in the 2600MHz band. But the country's regulatory body UKE has decided to postpone the auction, a move that has proved popular among the major operators.

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The official reason UKE gave for delay was problems with official paperwork, however, the auction has been marred with controversy from the outset.

Two of the operators thought likely to bid, Polkomtel and P4, had significant reservations about the auction, expected to raise PLN 1.8bln (€450m). P4 was concerned about the documentation associated with the auction in general, while Polkomtel, the largest operator in the country in terms of subscriptions and so far the frontrunner when it comes to LTE in Poland , even sent an official protest about the auction to Poland's parliament, the Sejm.

Polkomtel's protest was based on what it saw as rival operators Orange and T-Mobile trying to carve up the market between them through a joint venture called Networks!, set up in 2012 to manage the two companies' combined infrastructure.

When the company was created, the two carriers behind it didn't reveal their intention to share their spectrum with each to competition watchdog UOKiK. Also, because they effectively share spectrum blocks through Networks!, Orange and T-Mobile can, in effect, dodge the spectrum caps imposed on the auction by the regulator, Polkomtel argues. The fact that parties  already holding blocks in the 900MHz band can take part in the coming process also stings Polkomtel — the company argues that those 900MHz blocks weren't sufficiently considered when limits were set on how many blocks each operator can acquire during the bidding.

Whether Polkomtel's protest to the Sejm will be successful remains to be seen, as UKE has already delayed the auction on the grounds of a number of technicalities: clarifications on auction documents were published several hours too late, the organisation said.

Still, operators' concerns also played a part in the postponement, it announced: "The director of UKE's decision was made as the result of a desire to ensure stability and the certainty of the legal process, and to eliminate any formal and legal doubt that possibly accompanied the procedure."

The director herself, Magdalena Gaj, also said in the announcement that "the auction process itself and the documents accompanying it were prepared correctly and in line with all legal regulations."

So far, the cancellation has been well received, not only by P4 and Polkomtel, but even by Orange. "In truth a fast resolution would have been very much in our favour," writes Orange's head of PR Wojtek Jabczynski on the official company blog. "But paradoxically [the auction being] pushed back for some months should result in lesser controversy and less room for speculation for lawyers to cling to in order to delay or even block the frequencies being handed out."

The whole process will now start again, beginning with publishing documentation for interested parties. This also means UKE has room to make amendments to these documentations to appease any criticism the agency had to endure.

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