Government spokesman Libor Rocek, at a press conference in Prague, said that the sale would raise at least 20 billion crowns ($533million). He has unveiled plans to auction the fourth remaining license to a new entrant in a separate auction in September 2001.
In December 2000 the Czech government abandoned plans for a competitive auction after seeing the collapse of similar enterprises elsewhere in Europe. If the government had hoped to secure its position by employing such a rigid method of sale then it looks to have failed. When the figures were released on Wednesday Czech mobile interests universally condemned them. But the operators themselves are not universally agreed on what would be a suitable figure.
RadioMobil said that it sees a price of around $27 million as reasonable, while Alexander Tolstoy, chief executive of Cesky Mobile commented that a figure of $73.7 million would be nearer the mark. Whether the government or telecom operators are proved to be correct, there will surely be some bitterness on the part of the loser.
All signs from the government indicate that they will try everything in their power to gain the highest price possible. The revenue gained from the transactions is earmarked to offset the 190 billion crown budget deficit that is weighing heavily on the Czech authorities’ shoulders. But it looks unlikely that the licenses will fetch the asking price and the Czech authorities have yet to set a minimum level.
Recent auctions in France and Poland have suggested that leading companies are unwilling to spend the same amounts of money as during the UK and German auctions. All European parties will eagerly watch the results of the battle for prices as an indicator to future trends.
