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Update on global 5G spectrum auctions

The next generation of cellular networks will bring a huge boost in capacity. In order to provide more capacity, mobile operators need more spectrum. To support the commercialization of 5G, telecoms regulators around the world are conducting 5G spectrum auctions. Here we take stock of recent 5G spectrum auctions.

South Korea

In June South Korea completed a tender process through which it awarded spectrum in both the 3.5 GHz and 28 GHz bands. The government made available a total of 280 megahertz in the 3.5 GHz spectrum band and 2,400 megahertz in the 28 GHz band. The spectrum was divided into 28 blocks and 24 blocks.

Participant operators SK Telecom, KT, and LG U+ had a 10 block cap per spectrum band. The telcos paid a total of 3.6183 trillion won ($3.3 billion) for the spectrum, 340 billion won higher than the starting price of 3.3 trillion won.

In the 3.5 GHz range, SK Telecom paid nearly 1.22 trillion won ($1.1 billion) for 100 megahertz of spectrum, with KT paying 968 billion won ($870 million) for the same amount. LG U+ acquired an 80 megahertz license in this range for about 810 billion won ($728 million). In the 28 GHz segment, each operator secured 800 megahertz, paying between 207 billion won ($186 million) and 208 billion won ($187 million) for its license.

Spain

The Spanish government raised a total of EUR 438 million ($510.2) for the sale of 5G frequencies, the country’s Ministry of Economy and Enterprise reported following the auction conclusion in July. The Spanish government auctioned spectrum in the 3.6G HZ-3.8 GHz range, which will be key for the launch of commercial 5G services in the country. The government had set a reserve price of EUR 100 million for the 5G spectrum.

Including interest, spectrum reservation costs and other previously levied fees related to the auction, the ministry said the treasury would earn EUR 1.4 billion from the tender.

Spanish carriers Movistar, Orange, Vodafone have all acquired 5G spectrum after 34 rounds of bidding. These carriers submitted bids for a total of 200 megahertz of spectrum, which was sold under 20-year licenses for lots of 5 megahertz at a minimum price of EUR 2.5 million each.

Orange acquired a total of 60 megahertz of spectrum for EUR 132 million. The operator already holds 40 megahertz in this band. Telefonica, which operates in the mobile segment through its Movistar brand, purchased 50 megahertz of spectrum for EUR 107 million. The company already had 40 megahertz in the 3.5GH band. Meanwhile Vodafone acquired a total of 90 megahertz for EUR 198 million.

Looking ahead to future 5G spectrum auctions, Canada, Australia and Belgium have all articulated plans.

Australia

The Australian Communications and Media Authority (ACMA) announced it will award spectrum in the 3.6 GHz band for the provision of 5G services in November. The regulator confirmed that it will be auctioning off 125 megahertz of spectrum in the 3.6 GHz band. The spectrum will be divided into 350 lots across 14 regions of Australia.

“As a key enabler of the digital economy, the 3.6 GHz spectrum will ensure Australia is well-placed to realize the benefits of 5G. Timely release of 5G-compatible spectrum will facilitate the early delivery of next generation 5G services to the Australian public and industry,” said ACMA Chair Nerida O’Loughlin.

Interested carriers will have to pay a AU$10,000 ($7,400) application fee to participate in the auction. Prices for spectrum in metropolitan areas begins at AU$0.08 per megahertz per population. The regulator also said that the auction will include a spectrum cap, whereby each bidder is limited to 60 megahertz of spectrum in urban areas and 80 megahertz in rural areas.

Belgium

Belgian telecom regulator BIPT has published the full text of proposed legislation to auction new mobile frequencies with the aim of attracting a fourth mobile operator. The documents include a requirement for existing operators to offer national roaming to a newcomer. Current operators include Proximus, Orange Belgium and Telenet’s BASE.

The proposals remain subject to feedback from advisory bodies before becoming final. The Belgian government aims to award 5G spectrum in late 2019. The government expects to award mobile spectrum in the 700 MHz, 1400 MHz and 3600 MHz bands. The authorities also confirmed that the auction process will include the renewals of all existing licenses that are due to expire in March 2021, namely concessions in the 900 MHz, 1800 MHz and 2600 MHz bands. The frequencies are expected to be awarded for 20 years.

Canada

The government of Canada confirmed plans to auction key wireless spectrum for the provision of 5G service in 2020.

“We believe this puts us in a relatively strong position relative to our international peers,” Canadian press reported the country’s Innovation Minister Navdeep Bains as saying. “We will still be ahead of Australia and Germany and will be among the top five countries when it comes to making spectrum available for 5G.”

Bains also said that the government will also auction spectrum in the 600 MHz band next year. The government also announced plans to award millimeter-wave spectrum in 2021.

However, local carrier Telus recently called for the auction of 3,500 MHz spectrum in 2019. Telus’ CTO Ibrahim Gedeon said that Canadian consumers will be at a disadvantage if the government delays holding the auction of the 3,500 MHz spectrum until 2020.

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