Telefónica, Orange and Vodafone will from Tuesday bid in the auction for frequencies in the 700 MHz band, essential for the take-off of 5G. The fourth operator, Más Móvil – which is taking over Euskaltel in a 2 billion euro deal – has finally dropped out of the auction. The tender is a year late, due to the pandemic, which led the government to postpone the event at the request of the telecoms themselves. The latter made almost twenty allegations and have obtained an extension of the award deadlines and a reduction in the price. It was initially 1.17 billion euros and has been reduced to 995 million, a 15% cut.

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.

The price was also high compared to what is being paid in other countries for the deployment of 5G technology, which is key to their competitiveness. For example, in the UK operators have paid €325m for 20 MHz blocks of the 700 MHz band vs. an initial starting price of €400m here, despite the UK telecoms market’s turnover being twice that of Spain’s.”

Last week the government published the terms and conditions for the 5G auction to be held in Q1 21. Eight frequency blocks (700 MHz) will be bid on with a total starting price of 1,170 million euros, a one-off payment and a 20-year usage period. Obligations of 100% coverage are established for populations of more than 20,000 inhabitants in a period of 3 years, equivalent to providing service to 70% of the population. In addition, coverage will have to be given to highways, freeways and high-speed train stations.