The three existing cellular operators will likely face CZK 5 bil. (USD 186 mil.) in fixed fees for UMTS licenses. A fourth license should be sold in an auction. Should the three existing operators not accept the conditions attached to the offered licenses, these licenses will be auctioned off as well, according to the most recent proposal by the Czech Telecommunications Office (CTO). Cabinet should discuss UMTS license allocation within two weeks, according to the CTO head. The proposed fixed fee of CZK 5 bil. per license seems like an acceptable deal for the incumbents; other conditions, such as the required speed and extent of the UMTS rollout, are not yet known, but there are indications that they will be rather "soft." The Cabinet may nonetheless be under pressure to lower the fee in order to avoid a situation in which the incumbents would defer the licenses to an auction, hoping that lack of interest results in a lower price. There are fears (shared also by the CTO head) that the total amount to be generated by the sale of the four licenses will be less than the CZK 20 bil. budgeted for by the government. We feel that the current circumstance can only generate upside for both stocks with stakes in incumbent cellular operators, Cesky Telecom and Ceske radiokomunikace.