Altice slams latest 5G auction rule change in letter to EU officials

  • Lusa
  • 2 September 2021

The company warned the EU that the regulation "unduly favours the entry of new operators, distorting the conditions of investment and competition in a market that is subject to active competition."

Altice Portugal, the country’s leading telecommunications company through its unit Meo, has sent a letter to the European Commission expressing “its disagreement regarding the successive changes in the auction rules” in the competition for 5G mobile network spectrum, which it says are “generating uncertainties” and “compromising the strategy” of operators.

In the letter, which Lusa has seen, and which is signed by the company’s CEO, Alexandre Fonseca, the company starts by saying that already in November last year Meo had alerted the commission to the fact that the auction “unduly favours the entry of new operators, distorting the conditions of investment and competition in a market that, although small, is subject to active competition.”

The company goes on to recall a request it made in April to DG Connect (the commission’s Directorate-General for Communication Networks, Content and Technology) for attention to be paid to this matter, stating that Portugal’s National Communications Authority (Anacom) “had decided to establish new rules for the tender with the alleged aim of accelerating the pace of the auction.”

According to the document, the European Union authorities let Altice know that they had received this letter and previous ones, “reporting that the matter was being analysed together with the other competent services.

“On 29 June 2021, Anacom materialised the projected amendment to the auction regulations, establishing that each round would now last 30 minutes, with the rounds taking place on weekdays between 9 a.m. and 7 p.m.,” reads the latest Altice missive, adding that on 12 August the regulator announced a further change.

This latter change, it recalls, aims to “prevent bidders from using lower minimum increments of 1% and 3%, again in the hope that such a measure may speed up the conclusion of the tender procedure, which has been dragging on for more than 150 days.”

The company then states that “it has transmitted to Anacom, to the competent authorities and to the Portuguese Government its disagreement regarding the successive changes in the auction rules, which generate counterproductive uncertainties and compromise the strategy defined by each operator.”

In addition, it argues, “there is no reason for speed that justifies the consequences of disproportionate valuation of the public proceeds inherent in increments of 10%, 15% or 20%.

“The Portuguese regulator thus seems more concerned with optimising the revenue arising from the provision of the spectrum than with concluding the auction by obtaining compensation compatible with the investment efforts that operators will be called upon to make,” the operator states, adding that this policy, in its opinion, “goes against the national and European objectives of rapid development of 5G.”

Altice concludes by asking to be “informed of the Commission’s understanding” relative to the issues it has raised.

The draft regulation with the new changes to the 5G auction approved by Anacom was published in Portugal’s state gazette on 27 August and is in public consultation until Friday, 3 September.

Aimed at minimising “the excessive prolongation” of the 5G auction – which kicked off in November 2020, with the bidding phase for new entrants already having taken place and the main bidding phase underway since 14 January – the new regulation determines the “inhibition of the use of the 1% and 3% minimum increments that bidders can choose in each round.”

Stakeholders now have a period of five working days to comment on the draft regulations.