The French secretary of state for the telecom sector, Agnes Pannier-Runacher, said that the government is now giving itself until June 2020 to issue 5G licences at the end of the forthcoming 3.5 GHz spectrum auction. Earlier this month, unnamed sources told Reuters that the start of the bidding process was likely to be delayed until at least March 2020. In September, Orange was still hopeful for a launch of its first 5G commercial offers during spring, but this latest statement from the government now points to a longer-than-expected wait for the licences.
In a recent interview with Les Echos, Agnes Pannier-Runacher has revealed that 3.5 GHz spectrum on sale in the auction will have a minimum price of EUR 2.2 billion. As a next step, the government has opened a consultation on the draft decree detailing the auction floor prices for the two parts of the award process. The consultation closes on 12 December and the publication of the decree should then follow by the end of the year.
France's four network operators will each be able to acquire a block of 50 MHz at a fixed price of EUR 350 million in the first stage of the award process. After the allocation of the four blocks, totalling 200 MHz, operators will have to bid for the remaining 110 MHz of spectrum in an auction that will see each block of 10 MHz selling for a starting price of EUR 70 million. At the end of the two-stage tender process, the maximum spectrum holding that an operator can obtain is 100 MHz.
The announcement of the 5G auction floor prices has been greeted with criticism from network operators, which consider them as too high.
Defending its decision, the country's economy ministry said that it set "honest" prices and provided Les Echos with a benchmark comparing five European markets. This analysis focuses on the price for a block of 50 MHz, set in France at EUR 350 million, with adjustments based on population and duration of the licence. Italy tops the benchmark with a comparable price of around EUR 1 billion, well ahead of Germany and the UK (EUR 490 million and EUR 380 million respectively), while Finland follows all four countries at a distance with EUR 121 million.
