* Auction aims to boost competition, allow new entrant
* Conditions have angered incumbent operators
* Regulator sees one or more new entrants bidding
PRAGUE, July 30 (Reuters) - The Czech telecoms regulator hashad talks with potential bidders in an auction of mobilespectrum frequencies besides those that took part in an abortedsale in March, the office said on Tuesday.
The Czech Telecommunications Office (CTU) expects to start a new auction of frequencies to build fourth-generation mobilenetworks, marketed as 4G LTE, by the middle of August.
It plans to move ahead despite protests from the country'sthree incumbent operators -- Telefonica Czech Republic, T-Mobile and Vodafone -- whichhave criticised the auction conditions, mainly one reservingfrequencies for a new entrant.
Newcomer PPF Mobile Services, a unit of the PPF investmentgroup owned by Petr Kellner, the richest man in the CzechRepublic, took part in an aborted auction earlier this year andis also expected to enter the new auction.
But besides PPF, CTU said on Tuesday it believed there couldbe one or more new entrants bidding in the auction.
CTU spokesman Frantisek Malina said that in May theregulator met with "several potential investors" in London.
"Representatives of mainly institutional investment fundsstopped at our offices a week ago during a tour around severalCEE countries organised by Citigroup," he said in an emailedresponse to questions.
He add the investors could "pursue different strategiesranging from investing into greenfield operations to acquiring astake in one of incumbent operators."
"We strongly believe that with a transparent andnondiscriminatory auction we set up there can be one or more newentrants bidding for the LTE spectrum."
A Citigroup spokesman was unavailable to comment.
Komercni Banka analyst Josef Nemy said it still looked likePPF was the only serious interested new entrant.
"If I had to bet, I would choose there is no other seriousinterest other than PPF," Nemy said.
CTU has set aside part of the 800 MHz band for a new entrantin a bid to boost competition. The new spectrum will host superfast mobile networks based on fourth-generation technology thatwill allow faster mobile broadband access.
However, Telefonica CR, a unit of Spain's Telefonica, has threatened to complain to the European Union,saying it would be disadvantaged by the auction conditions.
CTU boss Jaromir Novak was quoted as saying in financialdaily Hospodarske Noviny on Tuesday that the office was readyfor a legal dispute.
Nemy said any further delays to the auction could harm PPF'sinterest in it.
Vodafone (VOD)