5G licences cost 50 million more than operators demanded

The 5G licences that Anacom will sell to operators at auction cost at least 50 million euros more than the three main companies are willing to pay. The conclusion is based on a letter sent to the Government by Meo’s leaders, Nos and Vodafone.

In the letter, dated January 24th, Alexandre Fonseca (Meo), Miguel Almeida (Nos) and Mário Vaz (Vodafone) refer to the prime minister, António Costa, “those who are considered to be the values that ensure the sustained development of 5G in Portugal”. And the maximum each operator is predisposed to “spend” in the auction is around 37 million euros, within the following terms:

• Operators demand a maximum value of 71 million euros for the “total spectrum of the 700 MHz band,” when Anacom asks for 115.2 million euros.
• The operators propose 41 million euros for the total of the band from 3.4 GHz to 3.8 GHz, when Anacom asks for 45.7 million.

Considering only these two frequency bands in auction, and comparing the values proposed by the operators with the values registered by the regulator in the auction regulation proposal, the difference in expectations is around 48.9 million euros.

These accounts do not cover the lots in other bands of the electromagnetic spectrum and will also be part of the auction. However, they are the two electromagnetic spectrum bands considered by Anacom as “relevant for 5G”. It is, by the way, on these two ranges that the “spectrum acquisition limits” imposed by the regulator are focused, in order to prevent a possible “hoarding” of the spectrum.

In the letter sent to the Government, the operators also demand a reduction in spectrum usage charges, “at least by 50%”, amounting to 45,000 euros per MHz per year.

They justify the proposed values with “the average value of reserve prices set at an international level” and “adjusted to national conditions”. And they even admit that the prices are lower, as the values “will necessarily have to be discounted according to the coverage obligations, and their degree of requirement, that will be defined in the auction.”

In addition to network access obligations for new entrants and virtual mobile operators, the proposed regulation, presented this Monday by the regulator, provides for coverage obligations via mobile broadband with a minimum speed of 100 Mbps, reinforcement of the voice signal, network development to provide services compatible with 5G and security. Infrastructure sharing via national roaming is also planned.

With this frequency auction, which will start in April and end in June, Anacom expects to raise a minimum of 237.96 million euros. The amounts raised will revert to a new Fund for the Digital Transition.