UPDATE 2-Five groups to bid in Czech 4G telecom auction
* Three incumbents, 2 newcomers to take part in Nov auction
* Czech Telefonica will bid, but challenges conditions
PRAGUE, Sept 30 (Reuters) - Five companies signed up to provide next-generation mobile telephony services in the Czech Republic via an auction of radio frequencies in which bandwidth will be reserved for a new entrant to boost competition.
They include the three existing providers - Telefonica Czech Republic, T-Mobile and Vodafone - as well as two newcomers, telecommunications regulator CTU said on Monday after the deadline for applications expired.
Expected to take place in mid-November but still dogged by legal challenges, the sale of frequencies for high-speed 4G wireless networks has already been aborted once.
Bids for the previous auction in March were so high that they risked inflating the price of the services and delaying launch, the regulator said.
Governments across Europe are rushing to roll out networks based on 4G's LTE (long-term evolution) technology, which enables faster mobile broadband access.
Earlier on Monday Czech investment group PPF, owned by the country's richest man Petr Kellner and a possible new entrant that participated in the March sale, said it would not join in this time.
Czech Telefonica's share price rose more than 3 percent after the announcement, though PPF also said it had recently sold its telecoms division. That business will compete as Revolution Mobile under new ownership.
The auction faces challenges against some of the conditions the regulator set out, including the plan to reserve space for a new entrant, which has angered the incumbents.
Czech Telefonica, a unit of Spain's Telefonica, said on Monday it had filed a lawsuit with the Prague municipal court against that stipulation and two others.
A company spokesman said the firm would still take part in the auction. T-Mobile, which appealed to the European Commission over the issue, would also participate, a spokeswoman said.
The Czech Republic's three existing operators have all said guaranteeing frequencies for a new player would leave them at a disadvantage.
The regulator has reserved space on the 800 and 1800 MHz bands for a new entrant. It said the fifth applicant was another newcomer, Czech group Tasciane.
It said it would open applications on Tuesday and expected the electronic auction for frequencies to start on November 11.
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