Invitation to participate in auction for allocation of licence for use of third-generation (3G) mobile communications system in Norway

Unofficial translation from Norwegian for information only
Legal authenticity remains with the original Norwegian version

With reference to Storting White Paper No. 32 (2001-2002) and Storting White Paper No. 18 (2002-2003) and pursuant to Sections 6-2 to 6-4 of the Act of 4 July 2003 No. 83 relating to electronic communication (Electronic Communications Act), interested parties are hereby invited to participate in the auction of the licence for use of third-generation (3G) public mobile communications system in Norway. Below follows a description of the auction process / rules for selecting a new licence holder for use of 3G.

1. Introduction

1.1 Object of the auction

1.1.1 Spectrum licence for 3G in Norway
The licence covers the frequencies 1964,9-1979,7/ 2154,9-2169,7 and 1900-1905 MHz. The licence is currently not in use and is available for awarding. The Ministry of Transport and Communications will assign the spectrum licence pursuant to Section 6-2 of the Electronic Communications Act. See draft spectrum licence. We reserve the right to make minor changes to the draft spectrum licence up until the auction is held.  

The frequencies must be used for third generation mobile communications systems. The use of the frequencies must be in accordance with specified IMT-2000-technology defined by ITU. The frequencies must not be used for other purposes than those covered by this licence without permission from the Norwegian Post and Telecommunications Authority. Rights and duties for the licensee will be based on the spectrum licence, as well as applicable regulatory requirements for activities carried out within the electronic communication sector.

1.1.2 Licence period
The spectrum licence will be assigned for a period of 12 years.

1.1.3 Fees
a) Frequency fee
An annual fee must be paid for the 3G-frequencies. The licensee is obliged to pay an annual frequency fee for as long as the party has the frequencies at its disposal. The Storting (Norwegian Parliament) determines the size of the fee in its annual budget process. The frequency fee will fall due for payment for the first time on 1 August 2008. The frequency fee was, for your information, NOK 20 million in 2007 for holding 3G-concessionaires. For 2008, the fee is expected to be NOK 22 million.

To be able to participate in the auction, the interested party must have paid all outstanding debt to the Norwegian state as regards frequency fees for other mobile communication licences previously awarded by the Norwegian state, cf. Item 7.

b) Administrative charges
Reference is made to Section 12-1 of the Electronic Communications Act and Regulations on fees payable to the Norwegian Post and Telecommunications Authority. The Act and Regulations constitute the legal basis for imposing administrative charges by means of administrative decisions.

The holder of the 3G-licence must pay an annual frequency administration charge to the Norwegian Post and Telecommunications Authority. The estimated frequency charge for the licence in 2007 is NOK 1 754 976,-.

To be able to participate in the auction, the interested party must have paid all outstanding frequency administration charges to the Norwegian Post and Telecommunications Authority, i.e. administration charges for other mobile communication licences previously awarded by the Norwegian state, cf. Item 7.

1.1.4 Minimum coverage / roll-out requirements
At least 40 % of the population must be covered by the network within six years from the date of the concession award, cf. Item 5 in the draft spectrum licence.

1.2 Auction - general
The auction is open to all interested parties, including parties that have not registered their interest previously. Licensees are not allowed to hold more than one 3G-licence. Neither can company’s that owns a licensee or possesses ownership that gives controlling interest of a 3G-licensee, cf. second paragraph of section 1-3 of Act 13 of June 1997, own more than one 3G spectrum license.

The 3G-frequency licence will be assigned following a sealed, first-price auction. Each participant in the auction may submit only a single bid, cf. Item 2.1. The highest bid will win, and the winner must pay the amount of their bid, cf. Item 8.

2. Framing of bid etc.

2.1 Bid
The bid must be unqualified, irrevocable and stated in Norwegian currency. The bids must be dated and signed by a person or persons who are authorised to bind the bidder, cf. Item 2.3.

The bids must be submitted on a special form. No changes or additions may be entered on the bid form. The procedures for submitting the bid are described in Item 3.1.

2.2 Guarantees
A guarantee payable on demand shall be submitted together with the bid. The guarantee payable on demand shall be issued in favour of the Norwegian State and be equivalent to two years’ estimated frequency fees payable to the state and two years’ administrative frequency charges, cf. Item 1.1.3. Hence, the amount of the guarantee shall be NOK 47 500 000,-. The stipulation of the amount of the guarantee does not, however, bind the authorities with respect to the determination of fees or charges in the period the guarantee is valid for.

The guarantee payable on demand must be valid until 1st January 2010, or until the bidder is no longer bound by the bid.

The guarantee payable on demand must be issued by a financing institution registered in the EEA area, made out in the above-mentioned amount, and otherwise meet the requirements stipulated by the Ministry of Transport and Communications.

2.3 Additional information and documentation
The following information must be submitted together with the bid:

a) A declaration made by persons with the authority to bind the bidder, confirming that the bidder, or relevant participants in cases where the bidder is a partnership, consortium, etc.;
o has not been put into compulsory liquidation, is winding up or has suspended payments,
o is not the subject of a petition for compulsory liquidation or winding up, or an order for simplified winding up proceedings, etc., and
o is established in accordance with the legislation in the country in which the bidder has its registered office.

b) Detailed and exhaustive schedules showing the bidder's ownership structure and a summary of any agreements which have determinative influence on the bidder.

c) The bidder's name and address, telephone number, fax number and e-mail address, as well as information stating how the bidder can be contacted during workdays between the hours of 9:00 a.m. and 4:00 p.m. local time.

2.4 Copies, language, etc.
The bid, guarantee payable on demand and additional information as specified in Item 2.3 must be submitted in one original copy.

The documents must be in Norwegian or English, and delivered to the Ministry of Transport and Communications in a sealed envelope marked "3G Bid" and the bidder's name and address.

3. Deadline for submitting bids

3.1 Submitting bids
Bids must be delivered to the Ministry of Transport and Communications.

The bid may be delivered during the working hours (between the hours of 9:00 a.m. and 4:00 p.m. local time) on Wednesday December 12th 2007. cf. Item 3.2 for the deadline for submitting bids. If this is the case, it must be delivered in person to Mr. Jørn Ringlund or Ms. Line Bakken, Ministry of Transport and Communications, Akersgate 59, Oslo, Norway. Arrangement for delivering the bid shall be made in advance, preferably with Mr. Jørn Ringlund, telephone number +47 22 24 82 02.

3.2 Deadline
The deadline for submitting bids, cf. Item 2, has been fixed at Wednesday, 12th December 2007 at 16:00 p.m. local time.

The bid is regarded as being submitted in time if it is received by the Ministry of Transport and Communications by the expiration of the deadline. The bidder assumes the risk of ensuring that the delivered bid reaches the person in question before Wednesday, 12th December 20067 at 16:00 p.m. local time.

4. Receipt and storage of bids

Submitted bids will be marked with the time/date of receipt and stored unopened until the official opening of bids takes place. Written receipts will be issued to confirm that bids have been received.

5. Public disclosure

Bids will in principle be regarded as information available to the general public.

6. Opening of bids, ranking

Information on the number of bids and the bidders' identity will not be made public prior to the opening of the bids.

The bids will be opened in a meeting at the Ministry of Transport and Communications on Thursday 13th December 2007 09:00 a.m. The meeting is open to the bidders and/or their representatives. Information regarding the number of bidders and the amount of the bids will be made public. The identity of the bidder with the highest bid will be made public.

The Ministry of Transport and Communications will rank the bids from highest to lowest bid. Ranking of bids in the same amount will be determined by the Ministry of Transport and Communications by means of drawing lots.

7. Rejection of bids

Bids that have not been submitted by the deadline, cf. Item 3.2, will be rejected and returned unopened.

8. Award of spectrum licence – payment

When the auction has concluded, the bidder with the highest ranked bid will receive a notification from the Ministry of Transport and Communications. The notified bidder shall pay the amount of the bid within 14 days after notification. The amount shall be paid in the manner determined by the Ministry of Transport and Communications.

When the amount of the bid has been paid, the Ministry of Transport and Communications will award the necessary 3G-spectrum licence.

9. Rejection

When the licence has been awarded, the other bidders will receive notification to the effect that they will not be awarded the spectrum licence and are no longer bound by their bids. The Ministry of Transport and Communications shall also make public the identity of the party awarded the spectrum licence and the amount of the bid.

10. Appeals

Decisions on award and rejection may be appealed in the usual manner. All bidders will be specifically informed of the right of appeal.

11. Questions concerning the announcement

All inquiries concerning the announcement to auction shall be directed to the Ministry of Transport and Communications, to Mr. Jørn Ringlund (jorn.ringlund@sd.dep.no), with a copy to the Norwegian Post and Telecommunications Authority, Mr. Jarl Kristen Fjerdingby (jkf@npt.no). Questions may be submitted up to and including Friday 7th December 20067, either in Norwegian or English. The inquiries will be kept confidential.