Ovum: 3G on a roll: more 3G licences in Eastern Europe and Russia

Martin Venzky-Stalling at Ovum writes that "a spate of new 3G licences is to be issued through a combination of auctions, beauty contests and hybrids. The countries that have announced they will be awarding new 3G licences are Russia, Romania, Georgia and Slovakia. Lithuania kicked the process off on 13 February 2006, when the National Regulatory Association (NRA) awarded 3G licences to Omnitel (TeliaSonera), Bite and Tele2."

Venzky-Stalling beleives that "some of these countries represent significant growth opportunities; penetration in Georgia, for example, stands at 20%. Penetration in Lithuania is already high, but it can still present a good opportunity for growth."

Ovum advises regulators "to carefully evaluate the feasibility of some licences, particularly third and forth licences, and to be clear about the policy objectives. These should, in turn, determine the licence award process and criteria. Moreover, regulators should set clear guidelines and award criteria, in order to avoid disputes similar to those that have arisen in Bosnia and Kosovo."

For bidders, Venzky-Stalling says to "carefully evaluate this opportunity, create an internal business case and develop a very clear bid strategy. The auction route can lead to overpaying if you do not have a clear bid strategy. The stakes are arguably even higher in beauty contests and hybrids. Losing could be an embarrassment and, of course, a business problem - particularly if the'expected winner' loses to a better-prepared bidder."