Spain slashes prices, eases conditions ahead of July 5G spectrum auction

By Clara-Laeila Laudette

MADRID (Reuters) – Spain has eased conditions and slashes the prices of its upcoming radio frequency auction by 15% for the 700 megahertz baseband, vital for next-generation 5G mobile data services, attracting hosting indebted telecommunications groups likely to bid for spectrum.

Seeking to encourage participation, the government has cut prices from 12.5% ​​to 20% from last year, according to the band.

“The conditions are still demanding and the prices could have been lower, but we recognize and thank the efforts of the government to improve the conditions,” said a spokesperson for the Spanish association DigitalEs, which represents the four largest operators. mobile and broadband.

She said the conditions balanced the state’s need to increase revenue with recognition of the industry’s debt levels and its importance to economic development.

The government has also relaxed the conditions for deploying services on newly allocated blocks, extending the deadline for deploying coverage by one year and specifying exactly where operators should prioritize services.

“We wanted to make it very clear which places need to be covered (by 5G networks) – the previous coverage criteria were very broad and left a lot of care for companies,” a spokeswoman for Spain’s telecommunications and telecommunications department told Reuters. digital infrastructure.

Any obligation to grant third-party operators access to infrastructure has disappeared from the conditions, a move that may attract the attention of regulators in Brussels and Madrid – and small businesses like MasMovil and Euskaltel that have relied on network sharing agreements.

Neither MasMovil nor Euskaltel – currently in merger talks to create Spain’s fourth operator – were immediately available for comment.

As an additional sweetener, the government said in April it would double the length of frequency concessions to 40 years, which operators have applauded as providing greater visibility.

Orange – which announced this month it would lay off 485 employees to deal with Spain’s highly fragmented and competitive market – declined to comment, while Vodafone said it was still studying the terms of the auction. .

“We wanted around 20% off the starting prices of each tranche,” an industry source told Reuters. “But the overall formula is reasonable, with an extended compliance period and doubled payback period.”

Spain has prioritized the development of 5G mobile data in its post-pandemic recovery strategy, allocating nearly 30% of the 140 billion euros ($ 171 billion) it will receive in European funds to a digitization.

Applications to participate in the auction must be submitted by July 2, with the auction taking place before July 21.

(1 USD = 0.8201 euros)

(Reporting by Clara-Laeila Laudette; Additional reporting by Nathan Allen; Editing by Mark Potter)

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