French telco watchdog kicks off 5G spectrum sale procedure

PARIS (Reuters) – France’s telecoms authority Arcep kicked off a long-awaited sale of 5G spectrum on Thursday, ending months of intense debate between the country’s four telecoms operators and authorities on how to best deploy the new mobile technology.

The detailed procedure, set to end with an auction in Spring 2020 for part of the spectrum, will allow Orange, Altice Europe’s SFR, Bouygues Telecom and Iliad to have a clearer idea of the total spending expected to deploy the new technology.

Disagreements between France’s finance ministry and the telecoms authority over the spectrum to be auctioned and the minimum price for the 5G frequency blocs postponed the process, two sources close to the matter told Reuters on Tuesday.

For French authorities, the key issue is to find the right balance between raising cash from the sale and avoiding putting an excessive financial burden on telecoms operators so that the deploy the pricy technology fast.

Germany and Italy have raised about 6.5 billion euros each through 5G spectrum auctions, an amount that shocked the industry and raised concerns among the four French telecoms operators whose margins are already suffering from a protracted price war.

France’s last spectrum auction in 2015 raised 2.8 billion euros for state coffers. Under the current plan, the 5G frequency blocs up for grabs are within the 3.4-3.8 gigahertz bandwidth for a total of 310 megahertz (MHz).

Under the framework put forward by Arcep, the sale will be made in two phases. In a first phase, four blocs of 50 MHz will be put for sale at a fixed price for each of the four telecoms operators if they agree to a set of commitments in terms of coverage of territory.

The remaining 110 MHz will be auctioned in blocs of 10 MHz.

The minimum price for the sale of the 310 MHz should not be higher than 1.5 billion euros, Arcep’s president Sébastien Soriano said in an interview with French newspaper Le Figaro on Thursday.

France’s economy ministry will have the final word on the floor price for the 5G spectrum sale.

Reporting by Mathieu Rosemain, Dominique Vidalon and Gwenaelle Barzic; Editing by Sarah White and Peter Graff

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