Nervousness in telecoms market mounts as newcomer aspires to access entire market

There is nervousness in the telecoms market now that a newcomer, most likely Citymesh, is taking an option on a reserved package of frequencies. “It’s doubtful that such a newcomer can really cause disruption.”

What is it about?

Two months after the auction of a package of frequencies for, among other things, 5G, we have an increasingly clear picture of what the mobile phone market will be like in the next twenty years. In the auction, a new telecom player can enter the market through a reserved package of radio spectrum.

In addition to the three established providers Proximus, Orange Belgium and Telenet, two newcomers are participating in the auction: Citymesh, the telecom division of ICT group Cegeka, and NRB, a subsidiary of insurer Ethias.

Telecoms regulator BIPT announced on Tuesday that one of the two newcomers wants to buy the booked package. It is a package of 83.3 million euros in frequency bands that can be used for 2G, 3G, 4G and 5G. Additionally, the newcomer can purchase additional 5G spectrum.

Therefore, Citymesh or NRB buys technical access to the entire market, although it is not yet clear if the newcomer also wants to serve all market segments. Telecoms regulator BIPT does not know exactly what the auction candidates intend to do with their frequencies.

BIPT does not say which newcomer it refers to, but there is only one name in mind in the sector: Citymesh, the network specialist from Bruges that was acquired in 2021 by the IT group Limburg Cegeka. Mitch De Geest, CEO of Citymesh, neither confirms nor denies that it is his company: “Our goal has always been to play a major role in the telecommunications landscape of the future in Belgium and that has not changed.”

Why is the fourth telecom player so important?

With the entry of a fourth telecom player, the federal government hopes to reduce mobile internet prices, which are relatively high compared to our neighboring countries. A comparative price study carried out by BIPT a few months ago showed that Belgium is quite competitive with neighboring countries in basic mobile services. But as voice and data needs increase, our country tends to become more expensive.



With the entry of a fourth telecoms player, the federal government hopes to reduce mobile internet prices.

According to a recent study by the Spanish consulting firm Axon Partners Group, prices could fall by 13 percent for a fourth player. This cannot be compared to the impact caused by Mobistar (now Orange Belgium) in 1996 and KPN Orange (now Telenet/Base) in 1999. They cut prices by 30 percent.

Another important note: Axon assumes that a newcomer can take advantage of economies of scale by tapping into existing operations, for example for fixed connections. None of the newcomers have those kinds of economies of scale.

For classic telecom players, a full fourth player means a line through the account. The next few years will be dominated by investments: in addition to the rollout of a 5G network, Belgium also has to catch up on fiber optic rollout. Proximus, Telenet and Orange can miss a price war like a toothache. David Vagman, an analyst at ING, calls the appointment of a full-fledged quarter “a worst case scenario” for existing providers.



For classic telecom players, a full fourth player means a line through the account.

What is Citymesh up to?

On Tuesday Proximus played

and Telenet

Congratulations now that one of the two newcomers is immediately ambitious. KBC Securities analyst Ruben Devos puts this reaction into perspective. “If a foreign player with a certain track record had announced that he was coming to Belgium, you would really see what nervousness means. The current uncertainty is best explained by that unknown factor: what is Citymesh’s plan? Does the company want to focus more on applications in the enterprise market, or does it also want to focus heavily on the consumer market?

Devos does not expect Citymesh to be able to open up the Belgian telecommunications market. “We believe that the chance of a newcomer seriously disrupting the three-player consumer mobile market is quite small. I hope he comes up with new apps.’



We consider the chance of a newcomer to disrupt the consumer mobile market quite small. I hope you will introduce new applications.

ruben devos

KBC Securities Analyst

In an interview with De Tijd in the summer of 2021, Stijn Bijnens from Cegeka and De Geest took a look at their cards. ‘More and more companies are considering offering a mobile internet subscription under their own brand’, sounded at the time. Companies would be particularly interested in the anonymous customer data they can extract from such applications. As a result, Citymesh is able to expand its existing commercial offering to the consumer market.

Citymesh could use its spectrum to build a platform that offers the necessary technical support for new players in the telecommunications market. Although Citymesh will not be able to immediately offer the network where new virtual operators without their own network (MVNO) can break through. It does not yet have sufficient infrastructure for this.

“The legislative framework provides for a mandatory national roaming period as long as the new player offers real coverage of 20 percent of the population,” says Devos. ‘The temporary roaming of a maximum of eight years gives a break and allows the newcomer to cover the entire territory in the meantime. The more coverage the newcomer offers, the more attractive it can be to MVNOs.”

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