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Dear Mr Biolato,

Presently, in Poland there is deciding the kind of giving concessions on UMTS.

In a situation where present GSM operators exert a great pressure on ministry of telecommunications if Italian firms are particular about Polish UMTS they should lobby for clear criteria of giving concessions.

Future of mobile phone in Poland is related with an establishment of competitive earthly skeleton webs. The end of monopoly of TP S.A. on connections between operators will appoint a big fall in prices of mobile phone. In a result mobile phone will be in common use. Prices of mobile phone will determine prices of stationary zone calls. It will bring multiple fall in margin of profit of TP S.A. A great growth of mobile phone will be followed after demonopolization of connection between operators. An undeveloped stationary phone infrastructure amplifies the tempo of spreading mobile phone.

Below there are arguments that may be used in lobbing for clear criteria of giving concessions. On the end of July I sent this questions to some firms, administrations, public institutions. However after declaring by Tomasz Szyszko ministry of telecommunications a minimal charge of each concession, i.e. 750 million EUR present GSM operators began a new public relations campaign.

PTC ERA and POLKOMTEL announced lobbying for low prices of concession on UMTS, that is a campaign that has on aim minimizing budgetary revenues. About prices of concession on UMTS there is an article on http://www.umts.hg.pl

Matters that have not been raised on the article:

1. A mistrust of Tomasz Szyszko Minister of Telecommunications, whom, few weeks ago, wanted to sell concessions for prices repeatedly lower than a market value. Tomasz Szyszko wanted to sell each concession for 110 million EUR.

2. Concurrently, when NETIA received a concession on stationary telecommunication in Warsaw region Tomasz Szyszko prepromised ELEKTRIM a decrease of a charge for its concession on this zone from 245 million EUR to 140 million EUR. It was in a situation when Ministry of Telecommunications, as and Maciej Srebro the former Minister did not acknowledge an ELEKTRIM's objection about giving exclusivity (excluding TP SA) on stationary telecommunication in this zone.

Moreover, Minister of Telecommunications supervised a telecommunication market was obliged to give second concession when ELEKTRIM was not acquitting from its commitments. ELEKTRIM did not fulfil declared number of telephone subscriber, not only on Warsaw region, but practically in all zones where received concessions. In result of ELEKTRIM lobbing actions (specific, not public activities) The Treasury lost 105 million EUR. Whereas there is a fact that ELEKTRIM overestimated a value of concessions on stationary telecommunications. But there are two different things.

3. Owners of GSM licences count on not giving concessions on UMTS to the end of 2000 or on receiving them at repeatedly lower prices as a market value.

Tomasz Szyszko does not guarantee proper realising a tender on UMTS. Very critically one should to assess a formula of the tender. Operators would be chose on the way of an auction with elements of "beauty contest". In the circumstances such contest should called "beauty of corruption". If a tenderer wants to pay a high charge for a concession that simultaneously fulfils all conditions. Nobody will throw out milliard EUR to wastebasket.

If Tomasz Szyszko so care about tenderers in order to they would not invest milliards EUR for concessions on UMTS not having possibilities to build webs then he should to take less corrupt rules. All offerers that fulfil conditions are invited to an auction.

Higher minimal charges of the concessions than present GSM operators were expected may testify that the minister, under pressure, changed his previous approach. Nevertheless, it is not a certainty that a previous cooperation between the minister and the GSM operators will suddenly refresh. Moreover, a controversial formula of the tender may bring suits against the decision and it would be the best solution for present operators.

Tomasz Szyszko would want to decide about financial conditions of tenderers, for example he will give more points to a company for its financial standing in comparison with an offerer that will propose a higher price of the concession. This approach often is suitable but in the case has nothing in common with a character of the tender. For the sake of UMTS is a special good a question of reliability of operators is not so important. That depends from details of the tender. About this is the article http://www.umts.hg.pl

A present formula of the tender instead of budgetary revenues guarantees suits against the decision.

A factor to the highest degree influencing on prices of the concessions would be resolving a change in Telecommunication Act that would allow foreign investors to start in the tender. Public invitation to tender would may to increase budgetary revenues, meant, likewise as in Germany, for payment of foreign debts. Polish government will be under pressure of beginning bigger payments of debts next year. It is one from basic premises of an occurrence of a financial crisis in Poland. Concurrently, budget saddled with meaningful expenditures will influence on slowing of an economic growth.

Alternatively, because of incomings from a sell of the concessions one can decrease a budget deficit or temporarily limit an increase of fuel's excise, influencing in both cases on a reduction of an inflation pressure.

The concessions on UMTS may be one of the most important elements refering to antycorruptibility declarations, payments of foreign debts, antyinflationary activities.

Yours sincerely,

Jaroslaw Suplacz