The test, which starts today Monday and will last four weeks, will be conducted along with mobile operators and equipment manufacturers in the municipalities of Alcázar de San Juan and La Solana, in the province of Ciudad Real. This trial is intended to assess whether the use of the 700 MHz band for the deployment of 5G may have any influence on DTT broadcasts using the 470 MHz to 694 MHz band, according to the Ministry led by Nadia Calviño.
The tests are being carried out prior to the allocation of these frequencies, which will be done via auction next July. The government has already announced it will extend the term of the new frequency licences for 5G from 20 to 40 years, which will allow operators more leeway to amortise the investments made in the deployment of networks. However, the main demand of the operators is still pending: that the starting price of the 700 MHz frequency auction be substantially lowered and that coverage requirements be relaxed, allowing more time to achieve the objectives set.
Currently the starting price set by the government for the upcoming auctions, scheduled for this summer, is €1.17 billion for all 700 MHz frequencies. This is a similar price to that of the 800 MHz band auctions in 2011 when the sector’s situation was more robust. However, there have already been messages that a 20% reduction could be made. As Bankinter analysts explain “in the UK operators have paid €325m for 20 MHz blocks of the 700 MHz band vs an initial starting price here of €400m, despite the UK telecoms market’s turnover being double that of Spain.”
According to Morgan Stanley analysts, the 700MHz – 75MHz band is one of the most attractive ones and “is estimated to be priced at €0.36-0.42/MHz, which is above Finland, but below that seen in Italy and Sweden.” (The first is the 3.5GHz – 20MHz band in which Telefónica and Orange will participate, at an estimated price of €21 million per 10MHz block. And the third is the 26GHz band where details are yet to be confirmed).
In addition, in terms of coverage, one of the operators is required to cover all cities with up to 20,000 inhabitants, representing 69% of the population coverage. The rest have to reach those cities with 50,000 inhabitants, equivalent to 52% of the population, within 3 years of the award.
On December 1, 2020, the government presented the Strategy to boost 5G, a plan to accelerate the deployment of these networks in Spain. It is endowed with 2 billion euros until 2025, of which 1.5 billion are included in the Recovery, Transformation and Resilience Plan.