5G auction will yield 237.9 million euros. Anacom defines lots, obligations and bidding limits

After the Government revealed on Friday the strategic plan for 5G, with the coverage targets and the framework in relation to the operators' obligations, Anacom marked today the presentation of the auction regulation for the fifth mobile generation, a relevant part and which operators are waiting for to define their network implementation plans. The draft regulation was approved last Thursday and is due to be published in Dirio da Repblica this week, on the 12th, starting from the 30 days of the public consultation, Joo Cadete de Matos explained today.

As for the calendar, the auction should start in April 2020, ending in June, this year, concluding the allocation procedures between June and August this year, maintaining the plans that Anacom had already defined. And it can still be anticipated, said Joo Cadete de Matos in response to journalists,

The president of Anacom believes that it is perfectly possible to meet the goals defined by the European Union with this calendar, remembering that there are already tests in cities, and "we can even have 8 cities at the end of the year". "I am fully convinced that operators are interested in meeting this goal", he stresses.

"5G has created many expectations around the world. It is an opportunity for digital transformation and benefits for society, but it needs to be created by creating the conditions of competitiveness", underlined Joo Cadete de Matos, remembering that it is important that we do not forget those who are still away from the digital world that must be integrated through this technology.

"These are significant investments but can only give the expected result if these conditions are applied in Portugal, said the president of Anacom

5G auction to be worth 237.9 million euros

Detailing the draft regulation, the president of the communications regulator states that "Anacom intended to include in this process a set of bands relevant to 5G" in addition to 700 MHz, which guarantees coverage and 3.6 GHz, which ensures capacity of 5G, explained at the beginning of the conferenceJoo Cadete de Matos.

tek Anacom 5G event Feb2020

In defining the regulation, Anacom took into account the possibility of entry of new operators and "ambitious coverage objectives", with concerns of including the populations of low population density areas and companies, which determined the goals that are already known.

What was not yet known was how the spectrum will be put up for auction, in the various bands, and the values, which are set at 237.9 million euros, in the total of all bands. "The objective is to enhance the spectrum", says the president of Anacom, explaining the logic for calculating the values, and considering that operators will have to make significant investments.

Only for 700 MHz, Anacom foresees the allocation of six lots of 2 x 5 MHz in the amount of 19.20 million euros each, in the total amount of 115.20 million. For the 3.6 GHz band, 40 10 MHz lots will be made available for a total value of approximately 45 million euros.

There are still discounts to be considered, of 25% for new operators in the 900 MHz and 1800 MHz band, and the possibility of paying one third of the auction value over a period of five years.

The entry of new operators is also promoted through a spectrum reserve, in a specific and autonomous bidding phase of the open phase, but with obligations that are also specific.

"Clearly these reserve prices underlie the objectives in the process that is associated with the auction and that does not end at the auction," he said, also referring to the rates of use of the spectrum that will be lower as had already been mentioned by the Government.

Coverage targets for 2 cities in 2020

Two cities with 5G coverage, one on the coast and another in the interior, and 90% of the population with fifth generation mobile access are some of the obligations that mobile operators will have to fulfill, but the Resolution of the Council of Ministers, published already at the end of On Friday, he put forward some more determinations that will be relevant in defining the auction.

The guarantee of 80 to 100 MHz of spectrum in the 3.6 GHz band is one of the determinations of the resolution, which meets the requirements of operators for the quality of 5G. But there are some more ideas that show that the requests of Altice, NOS and Vodafone were heard, such as the determination of a "consultation to fix a new lower value of the annual spectrum usage fees, taking into account that the spectrum width assigned by this procedure will be much higher than currently available, and the values ‚Äč‚Äčin the table currently practiced may prove to be excessive ", says the document.

During the press conference of the Council of Ministers, it was mentioned that the value of the frequencies is not the priority or receive the maximum revenue, but rather to ensure that companies access the 5G spectrum. The challenge is to finance the digital transition, said the Minister of Infrastructure.

By the end of 2020, the European Union determined to have at least one city with 5G, but the Government highlights the objective of two cities, one on the coast with more than 50 thousand inhabitants, and the other having to be in the interior of the country, just so The capacity of the mobile fifth generation is effectively tested.

By 2023 all municipalities with more than 75 thousand inhabitants, public hospitals and health centers on the coast, political universities, 50% of industrial parks, international airports and military installations, are some of the requirements of the Government, including major highways, much of the railway line, 98% of the metro, main Portuguese ports. In 2025, a large part of the population will also have to be served. "An ambitious timetable for the next 5 years", stresses the minister. The effort will have to be made by the companies that access the auction, but be supported by the Government. You can read the measurements in detail that Sapo TEK had access to.

Portugal has been identified as one of the countries that is lagging behind in the 5G timetable, and even today a European Observatory document for 5G indicates that commercial services already exist in 10 countries, although the number of tests carried out in Portugal has recently been highlighted. .

Reduction in the value of spectrum fees

The Government had already been pressured by the three largest Portuguese telecommunications operators, Meo, NOS and Vodafone, which marked a joint position for a request for a 50% reduction in the amount currently practiced in 4G. The companies were willing to pay a maximum of 48 million euros per year for the use of 5G frequencies, stressing that they would thus only be able to invest in the infrastructures and minimum coverage required in the contracts. NOS and Vodafone also anticipated the Government's decisions and announced a partnership for sharing infrastructure in the country. The partnership between the companies responded to the call left by ANACOM on the possible conditions for sharing infrastructure and co-investment by operators.