The tough commercial battle on the mobile phone market became even tighter last month, when RomTelecom decided to defend in court its exclusive right to operate the frequency DCS 1800, in front of its competitors, MobiFon and MobilRom, whose licences granted them the right to use some channels on the same frequency.
Should RomTelecom win the trial, the two operators will lose at least 25 million dollars each, the money they paid for licences, while the Romanian state - namely taxpayers, might lose a sum that could exceed 100 million dollars, depending on the damage the justice will decide upon.
The Bucharest Court of Appeals, the Administrative section, decided on June 29 to suspend the operating licences granted to MobiFon and MobilRom, and the basic action, namely the suspension of these licences, as requested by RomTelecom, was to be taken to court starting August 16.
Practically, RomTelecom and Cosmorom (a company entirely held by RomTelecom and operating the mobile phone licence on the frequency of 1,800 MHz) initiated a legal action against the National Agency for Communications and IT, demanding not only the suspension and annulment of licences granted in 1998 to GSM operators MobiFon and MobilRom, but also commercial damages worth 100 million dollars, plus 400,000 dollars for harm done to the public image and 100,000 dollars for each day the legal decision was not observed.
"Exclusive operating right on the 1,800 frequency was granted to RomTelecom by Government Decision 793/1998," RomTelecom regulation and public relation executive manager Radu Moldovan said. The Government Decision mentioned by RomTelecom stipulates in article 2 that "until December 31, 2002: a) the National Telecommunications Agency RomTelecom will be the exclusive commercial operator for digital cellular telecommunications (DCS 1,800) and b) no other licences for mobile phone network operation will be released, irrespective of the technology other companies might use, unless there is an obvious demand on the market and only by means of public tender which existent mobile network operators are entitled to attend."
The quoted decision is dated November 12, 1998 and is countersigned by the Communications minister at that time, Sorin Pantis.
Initial licences of MobiFon (Connex commercial service) and MobilRom (Dialog) were granted, by tender, in 1996 and are valid for 10 years. However, these licences are not the object of the litigation, therefore the two companies will continue to operate on the GSM 900 frequency. According to Pantis, the real problem is that, in December 1998, immediately after Government Decision no. 793 was released, MobiFon and MobilRom were granted the right to use up to 14 channels of the 1,800 MHz frequency band.
The two companies paid 25 million dollars each for the right to use these channels, Pantis stated. However, they were to be used only in case the traffic on the channels assigned in the 900 MHz band was extremely high. Sorin Pantis states that the measure was taken as there were no additional channels in the 900 MHz band available to be transferred from the National Defence Ministry to the use of the GSM operators. "The Army wasn't able to give them so many channels as they had asked for, and we were forced to grant them a few channels in the 1,800 MHz band," Pantis was quoted as saying by Mediafax. Former Communications minister states that the licence of the two operators "cannot be suspended," but in the worst case they may be deprived from their right to use the channels in the 1,800 MHz band. "The two companies, MobilRom and MobiFon, were not granted operating licences in the system DCS 1,800. We have not granted them the operating channels in the 1,800 MHz band, as they made no request to this sense," ANCI chairman Sergiu Iliescu was quoted as saying by Mediafax. According to the agreement concluded in 1998, the two operators were entitled to use the channels in DCS 1,800 starting August 1, 2000, which justifies the "imminent danger" invoked in Court by RomTelecom. ANCI chairman states that the agency filed an appeal against the decision made by the Court of Appeals. "The request to suspend the licences is not valid until the appeal is solved in Court," Iliescu stated.
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