Auction for 4G mobile network licences to start next week

print this

An auction begins next week in Finland for licences to operate fourth-generation (4G) mobile telephone networks. The starting price for the auction, organised by the Finnish Communications Regulatory Authority (FICORA) is EUR 15,000 per megahertz.
      A 4G Long Term Evolution (LTE) network generally requires a package of at least 20 megahertz for each telecommunications operator. The fee for taking part in the auction is EUR 50,000, which puts the theoretical starting price of a licence at EUR 350,000.
      In the auction, frequency bands are sold in blocks of five megahertz each in the frequency ranges of 2,500-2,700 megahertz, and 2,620-2,690 megahertz. In between these ranges, a frequency package of 50 megahertz will be sold, which is suitable for WiMAX (Worldwide Interoperability for Microwave Access) technology. Its price without the participation fee is EUR 750,000.
     
What makes the auction historic is that at the beginning of the decade, licences for the third generation mobile phone systems were granted in Finland for free to the applicants judged by the government to be the most capable. Germany, meanwhile, sold the 3G licences by auction, bringing about EUR 50 billion into the state coffers.
      The Finnish Sonera lost EUR 4 billion in the German auction.
      In the 4G auction the state is likely to get considerably more than the starting price.
     
In Norway, the 4G auctions reportedly netted the state EUR 25 million, and in Sweden, the yield was EUR 230 million. However, the Ministry of Transport and Communications believes that the current recession could considerably curb the desire of the companies involved to try to outbid each other.
      Revenue from the Finnish auction has not been earmarked for any specific purpose, says Juha-Pekka Ristola of the communications section of the Ministry of Transport and Communications.
     
The auction will be held in a closed electronic trading system. The length of the auction depends on how quickly the participants respond to the bids of their competitors. Taking part in the Finnish auction will be at least Elisa, TeliaSonera, and DNA. Only the winners’ names will be published.
      Winners will also be allowed to sell their licences to other operators, subject to the approval of the government; the government can veto such a transfer if it is seen to jeopardise national security.
      Special legislation on auctioning the radio frequencies in question came into effect in early July this year. If auctions are to be organised in the future, Parliament will have to pass new legislation on the matter.


Previously in HS International Edition:
  Nokia believes in rapid breakthrough for 3G mobile technology (24.2.2004)
  Investments in German mobile phone network to cost Sonera FIM 15 billion (24.8.2000)
  Sonera´s Group 3G wins third generation mobile network licence in Germany (18.8.2000)

Links:
  Finnish Communications Regulatory Authority (FICORA) website

Helsingin Sanomat