How to push business the Czech Post Office’s way

Internet, data and voice services. The Ministry of Interior’s ambition as the founder of the Czech post office, Česká pošta, to turn the state enterprise into an integrated government service organization in the sphere of information and communication technologies (ICT) is taking shape.

According to material Deputy Interior Minister Radek Šmerda has already sent to the committee stage — and which Czech Position has at its disposal — apart from eGovernment services such as Czech POINT and data mailboxes, Česká pošta would provide government institutions a fixed internet connection and the services of a mobile operator. The idea is to amend the deed of foundation of Česká pošta.

Although the ministry’s aim, according to a white paper, is to “achieve significant savings and improve processes relating to the provision of these services to the public administration” by means of a shared provider of ICT services in the public sector (i.e. Česká pošta), the material lacks any information on the impact on public finances. This applies not only to the generally announced savings, but also to the expenses involved in implementing fundamental changes to access to information and communication technology services.

After the ministry’s “Information on the provision of selected information and communication technology services used by the public administration” is signed off on at the committee stage it will be discussed by the government. Note that the plan to push new business Česká pošta’s way — which smacks of unauthorized public support for a state enterprise — has surfaced at the same time as an auction is in the pipeline of available frequencies for the potential entry of a fourth mobile operator on the market, full liberalization of postal services is nearing completion, and the government’s plan to transform and privatize Česká pošta itself is still on the cards.

Mobile services

The first speculation regarding the plan to turn Česká pošta into a national mobile operator for the public administration appeared on Feb. 6 in Týden. The weekly magazine reported that a team based around Tomáš Ječný, executive director of the ICT division at Česká pošta, has been delegated with creating the necessary strategy. “The post office is already providing many ICT services to the Ministry of the Interior, and their provision to other central authorities is the direction approved by the supervisory board of the enterprise. It is now for the Post Office to submit more detailed plans,” ministry spokesman Jiří Korbel said earlier this month, reacting to the information. However, he did not confirm whether Česká pošta is to become a mobile operator as well. “The Ministry of the Interior has no plans in this regard at present,” he said.

According to the Ministry of the Interior consideration might be given in the future to the allocation of rights to the Czech Post Office to use some of the available frequencies

© ČTK

The problem is that the material as submitted by Šmerda seems to indicate the opposite, and contains another, potentially explosive, idea. “In order to improve the public administration communication infrastructure and achieve further savings, consideration might be given in the future to the allocation of rights of Česká pošta to use some of the available frequencies with the aim of providing mobile telecommunication services, above all for the public administration,” the document says. 

In other words, the ministry is thinking about earmarking some of the available frequencies for the provision of mobile services outside of the framework of a tender. The Czech Telecommunication Office (ČTÚ) is planning to auction off these frequencies this year.

How do the current mobile operators react to this plan? “We believe the auction should have clear, non-discriminatory rules stipulated in advance, and these conditions should not put any bidder at a disadvantage. Česká pošta has the same right to participate in an auction as any other company, but all bidders should have the same chance of acquiring the radio spectrum being auctioned off,” Martina Kemrová, spokesperson for T-Mobile, told Czech Position.

Telefónica O2 reacted similarly. “We would give precedence to the allocation of frequencies by means of an open auction under non-discriminatory conditions. The compliance of any other procedure with the principle of the protection of economic competition would be a matter for the Office for the Protection of Competition[ÚOHS],” Blanka Vokounová of the company’s communications department wrote to Czech Position.

The creation of another mobile operator could “make a positive contribution to improving the competitive environment, pushing down prices, improving the quality of services provided and to the creation and utilisation of new technologies and services in this sphere,” the material adds. While this might be true, the question is whether the creation of a new operator through circumvention of the rules of economic competition is the right road to go down. And again there is no concrete cost-benefit analysis of mobile services being provided by Česká pošta in comparison with those prices which ministries and other authorities are already able to receive from the current operators.

A fourth or virtual operator?

The ČTÚ, meanwhile, is preparing the conditions for holding an auction of available frequencies for operating mobile services, above all high-speed mobile internet by means of the 4G network. The auction is set to take place in October or November. As Pavel Dvořák, former head of the (ČTÚ, said inan interview for iDnes.cz, one of the aims of the auction is to attract a fourth operator to the Czech market.