Transcript 1800 MHz

Spectrum triband auction
2013 in the Czech Republic
Pavel Sistek
International Relations and Strategies Department
RSPG/BEREC WS, 11 November 2014
Czech Telecommunication Office
Spectrum triband auction 2013
Agenda
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Aim of the auction
Considerations of packaging
Packaging and lots
Choice of auction format
Procedure timeframe
Spectrum caps
Coverage obligations, QoS
Support of competition
Minimum prices
Auction results
Result – our lesson
Spectrum triband auction 2013
Aim of the auction
• Authorise spectrum in 3 bands: 800 MHz, 1800 MHz and 2600 MHz
• Create and support competitive environment
• Deployment of 4G mobile broadband services
• Implement Goals of Digital Czech (and RSPP)
• National policy: Auction initiated based on Government Decision
No. 78 issued on 26 January 2011
Spectrum triband auction 2013
Considerations of packaging
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Question 1: Shall we auction all 3 bands together or separately?
– Together, because the bidder has the possibility to optimise its portfolio.
Question 2: Abstract blocks versus concrete blocks?
– Concrete blocks:
• In the 700 MHz band,
– the first 2x5 MHz pair could suffer from coexistence with the
DTT
– Reserved block of 2x10 MHz: Priority for a newcomer.
• In the 1800 MHz band:
– 2x15.8 MHz for a newcomer (reserved through spectrum caps)
Question 3: Fragmentation of continuous blocks in the 1800 MHz band:
Yes or no? => discussion about the final „symmetry or asymmetry“ of the
spectrum among operators.
– Our decision: Blocks fragmented (1 MHz blocks), market decides
Spectrum triband auction 2013
Packaging and lots
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Inputs:
2600 MHz: 190 MHz
800 MHz: 2x30 MHz
Category A1.1
2x5
A2.1
2x5
A2.2
2x5
A2.3
2x5
A3.1
Category
A3.1
2x10
C, D
5 MHz channelling
concrete blocks
1800 MHz: 2x25 MHz
Category B1.1 B2.1
2x0.2 2x1
B2.2 B2.3
2x1 2x1
B2.4 B2.5
2x1 2x1
concrete blocks
B1.1
2x15.8
B2.6 B2.7 B2.8 B2.9
2x1 2x1 2x1 2x1
Spectrum triband auction 2013
Choice of auction format
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SMRA chosen with regard to
– Analysis of results of previous auctions (both the CCA and SMRA),
– The fact of partially complementarity and substitutability of 4G lots exist in the
800, 1800 and 2600 MHz,
– Final decision was made after the successful German multiband auction,
therefore – SMRA,
– The fact that the SMRA format was preferred by potential applicants.
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Auction Phase – main principles
– Eligibility of the 1st auction round: Based on the amount of the Warranty
deposited during the Qualification phase
– The increase of bids: By 5% of the minimum price of the Auction Lot
– Highest Bid Withdrawal: Max. 2x, but resulting in decrease of activity points
– The Abstention option: Max. 4x without changing the amount of eligibility
points
– If no Highest Bid during last 2 rounds: Possible reduction of the price by 10%
Spectrum triband auction 2013
Procedure timeframe
• First auction:
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September 2011: Provisional principles of tri-band auction published
Spring – summer 2012: Consultation of principles
End of 2012: Auction and bidding.
A strong newcomer induced auction competition.
Auction STOPPED on March 2013, after 240 bidding rounds (bidding prices
exceeded € 740 mil.). Why? Excessive price could have been reflected to
high prices of mobile services.
• Spring 2013: AUCTION RESTART – „second auction“.
– New consultation with supporting conditions for possible „4th
operator/newcomer“.
– December 2013: New bidding started. 4 operators entered the Auction, after
14 bidding rounds 3 operators successfully completed bids.
– Remaining (=unsold) frequencies are in the 1.8 GHz and 2.6 GHz band.
Spectrum triband auction 2013
Spectrum caps
• 800 MHz:
– First attempt (auction 2012), SC 22.5 MHz incl. 900 MHz bands
licenses
– In 2013, after „restart“, a 2x10 MHz block was reserved for a
newcomer.
• 1800 MHz:
– SC 2x23 MHz in order to reserve the contiguous block 2x15.8 MHz
for a newcomer (i.e. 2x9 MHz available for existing operators).
• 2600 MHz:
– FDD max. 2x20 MHz (min. 2x10 MHz)
– TDD min. 15 MHz.
Spectrum triband auction 2013
Coverage obligations, QoS
• Coverage obligations, QoS: Priority given to cover lower density
population areas.
– 800 MHz band:
• 30 months to start „low coverage“; 2 years to offer „good
coverage“; 5 years to reach „excellent coverage“.
• Specific coverage conditions apply for railways and highways.
– 1800 MHz and 2.6 GHz: soft conditions with respect to local reach.
• QoS: At least 2 Mbit/s during first 7 years, then 5 Mbit/s. (Note: 3G
coverage on „other bands of the licence holder“ accepted).
Spectrum triband auction 2013
Support of competition
(in provision of mobile services in “new bands”)
Conditions applied to licence holders:
• „National roaming“ in the 2G or 3G networks for a newcomer:
If a new operator were to win some frequencies, it would have been allowed
to enter the networks of the other operators (with further conditions).
– However, roaming was not applied – since no newcomer took part in the
auction. (Note: New future auction could bring it into effect.)
• „Wholesale offer“ in 4G networks for any MVNO, MVNE should be available
for 12 years. (It is part of the “voluntary commitments“ of licence holders).
Future after the 12 years?
• After the obligations of NR and WO finishes, NR/WO applicants will be strong
enough and standard commercial agreements will apply.
Spectrum triband auction 2013
Minimum prices
• Benchmarks were based on results of other European auctions.
Observed prices (EUR/MHz/pop) showed huge variations.
• Starting prices set rather higher due to expected possible absence of
competition in bidding.
Band
Block (lot)
Minimum price per block
800 MHz
2x5 MHz
First block € 39 mil.
other blocks € 43 mil.
1800 MHz
2x15.8 MHz
9 blocks 2x1 MHz
€ 19 mil.
€ 0.039 mil.
2.6 GHz
2x5 MHz FDD
5 MHz TDD
€ 3 mil.
€ 1.2 mil.
Note: Extracted, simplified information
Spectrum triband auction 2013
Auction results
Winners: After 14 bidding rounds, the 3 existing operators acquired the same
amounts of frequencies in all three bands (symmetry). 200 MHz sold.
Remaining spectrum (Note: subject of future auction):
1800 MHz: 2x15.8 MHz
2.6 GHz: FDD - 2x10 MHz
TDD - 50 MHz
LTE starting operation
10/2014
Auction income (11/2013):
€ 331 Mil.
1200 LTE BTS‘s in operation (October 2014)
Further positive side effect:
Price revolution: In April 2013 (after the first stoping the 2012 Auction), all
mobile operators introduced new and LOWER mobile prices.
Spectrum triband auction 2013
Result – our lesson
• Block reservations for „newcomers“ is matter of strong
discussions and needs good arguments.
• During bidding, withdrawal of highest bid should result
in some limitation in activity points during further bidding
rounds.
• Strong newcomer could force the price to excessive levels.
• Minimum or market price cannot be calculated – it is an
academic issue; therefore, in reality, the starting price is a
matter of market and/or „socio-political“ circumstances.
• Proven approaches welcomed.
Spectrum triband auction 2013
Useful links
CTU website
www.ctu.cz
Triband auction 2013 (Czech, English)
http://www.ctu.cz/ctu-online/elektronicka-uredni-deska/vyhlasenivyberoveho-rizeni-na-kmitocty-v-pasmech-800-mhz-1800-mhz-a-2600mhz-2013/vyhlaseni-vyberoveho-rizeni-2013.html
Map of LTE 800 MHz _ BSs starting operation
http://start-lte.ctu.cz/
Thank you for your attention
Pavel Sistek
Czech Telecommunication Office
International Relations and Strategies Department
[email protected]