Vodafone Romania has sued the country’s telecommunications authority, Ancom, and requested a payment of €15.1 million (US $16.2 million) from the regulator. That figure represents the operator’s estimate of compensation for the losses incurred due to the fact that half of the spectrum it acquired in 2012 from the Romanian government cannot be used in more than 20 counties because of interference caused by telecommunication companies in Ukraine, according to a local report. Vodafone has proposed that the compensation be deducted from fees the company owes to Ancom, which means that the eventual Ancom debt would be paid in a few years. Vodafone Romania paid €230 million (US $247 million) to the state for the licenses bought in in 2012.
Tarifica has been writing in recent Alerts about the importance of infrastructure improvement for healthy mobile telecom markets in countries around the world, especially developing countries. As demand increases—particularly for high-speed data—more spectrum must be made available in order for operators to satisfy that demand. However, while we applaud governments for holding generous spectrum auctions with affordable reserves, this story from Romania sounds a note of caution, reminding us that frequency bandwidth in itself is not enough. Governments must insure quality as well as quantity in order for spectrum licenses to be worth the prices paid. It appears in this case that the Romanian government has not put the technology in place that would block interference of its spectrum by signals on the same frequencies emanating from a neighboring country.
The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: Click here.
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