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Procedure for 3G Licenses in Romania Approved

23rd July,2004

Europe : “One of the last documents I have signed as a minister was the Order on 3G licenses. This order establishes the procedure for awarding the 3G licenses in Romania, defined based on the consultation with the main communications providers, so that the terms and conditions are in accordance with the market situation. This means that we will have 3G licenses in Romania by the end of this year”, declared the Minister of Communications and Information Technology, Dan Nica, during the press conference organised today, July 13, 2004, at MCTI headquarters.

The Order states that the procedure is launched and the licenses will be granted within 3 months after the date set out in the announcement. The announcement regarding this tender will be posted in the press as the Order has already been signed. When the license is awarded, each license holder will pay 35,000,000 USD for the spectrum of frequencies allocated for third generation mobile technology.

“This is a tender on investment projects and is focused on the development, marketing and commercial plan. The conditions for participating are related to the turnover, as we want to avoid the situation where a company intends to develop the 3G technology in Romania but the last year’s turnover is of only 1000 USD. The minimum turnover is of 300 million EUR, and these companies may choose partners from any field, such as banks or investment funds. Therefore, the tender is opened for an entity as well as for a group, the latter having the obligation to declare the structure of shareholders”, declared the Minister Nica.

The compliance with the financial and technical prerequisites related to the construction of a network will be verified during the evaluation of the offers, in accordance with the plans presented in the request as well as the candidates’ capacity to attain their long-term goal. There will also be analysed the financial capacity and technical competence of the candidates, who will have to demonstrate they have the necessary capacity to carry out their obligations. The candidates must have access to the necessary capital for the construction of a network. The eliminatory criterion is the turnover, which must be over 300 million EUR in the field of electronic communications. In addition, the candidates must demonstrate that the respective companies have certain experience and expertise in this field. All the candidates who prove their competence and capacity to build a network will enter the next stage, the selection stage. MCTI will make public the list of the candidates for the second stage. Four licenses may be awarded in total.

The candidate shall demonstrate in a clear and precise manner the manner in which his intentions interconnect with the plans related to the network and technology based on long-term market analyses, network development plans, the calculation of costs and cash-flow analyses etc. The coverage, distribution and development rate will be evaluated based on the candidates’ commitment as regards three different deadlines: December 31, 2005 (the first development stage), December 31, 2008 (the second stage) and December 31, 2011 (the third stage). There will be a commitment for each of these stages regarding: the number of persons in the respective area who will benefit from the services; the total number of kilometres of national roads to be covered by the provided service, as well as the surface of the area covered by the provided service.

The minimal coverage will include Bucharest and 10 large municipalities chosen by the candidate. In case of failure to comply with the coverage conditions set out in the licenses, acknowledged during 3 different controls, the penalty due by the license holder will be calculated as a percentage of the 35,000,000 USD fee for spectrum allocation. The 3G mobile communications licenses are awarded for 15 years and will be renewed upon the holders’ request, under the conditions set out by the competent authority.

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