Spain's auction of 200 MHz of spectrum in the 3.6-3.8 GHz band for 5G use reached total bids of EUR 437.7 million, more than double the minimum EUR 200 million required, the Economy Ministry announced. Including accumulated interest payments over 20 years of EUR 542.1 million, plus spectrum-reservation fees of EUR 868.5 million, the grand total raised by the Treasury is expected to be EUR 1.41 billion.
The four leading operators, Movistar, Vodafone Spain, Orange and Masmovil, were bidding for 20-year licences for lots of 5MHz at a minimum price of EUR 2.5 million each. In separate statements, Vodafone Spain said it acquired 90 MHz at a total cost of EUR 198.1 million through the auction, and Telefonica announced the acquisition of 50 MHz for EUR 107.4 million.
Prior to the auction, Vodafone owned no spectrum in the 3.4-3.8 GHz band, considered key to the successful launch of 5G services, while Telefonica already held 40 MHz and now has a total of 90 MHz.
According to Expansion, Orange paid EUR 132 million for 60 MHz while Masmovil, which held 80 MHz before the auction, acquired no new spectrum in the bidding.
The fees for the licences will be paid over 20 equal annual instalments. Telefonica, which said it will pay a 2.35 percent interest rate on the outstanding sum, claimed it spent the least per MHz for its licences among the four companies bidding.
The company added that the spectrum acquired will allow it to launch a nationwide 5G network starting in 2020.
The electronic auction took the form of successive simultaneous bids until a winner was declared and lasted five days. Winning bids ranged from EUR 9.6 million for a 5 MHz block to EUR 12.2 million.
Under Spain's 5G rules, each operator is permitted to acquire no more than 120 MHz in the 3.4-3.8 GHz band, which is capable of delivering data transfer speeds of 1-3 Gbps in urban areas equipped with small cells. Markets regulator CNMC proposed in April that a maximum of 235 MHz of 5G spectrum be allocated per operator within the so-called mid-bands of 1.8 GHz, 2.1 GHz, 2.6 GHz and 3.4-3.8 GHz.
