The Finnish telecom authorities have finalized the auction rules for the first 5G band, i.e. 3.5 GHz (3.4 – 3.8 GHz), after public consultation. The key change is that the band is divided into 3 licences only with each including 130 MHz of contiguous frequencies as follows:
A: 3410 – 3540 MHz
B: 3540 – 3670 MHz
C: 3670 – 3800 MHz
However, as we discussed in a previous blog, the upper part of the band (3600 – 3800 MHz) includes rather severe usage restrictions in Eastern Finland. In consequence, the primary blocks A, B and C listed above are further divided into secondary blocks in such a way that each licence includes one block in the lower band and another in the upper band; in other words, one unrestricted block and one restricted block. The following graph illustrates this division.
By default, licence A gives usage rights to a combination A1 + A2, B to B1 + B2 and C to C1 + C2. However, there is one more twist: licence holders can jointly agree on switching to using the primary blocks instead in areas where usage restrictions do not apply. In practical terms this means that the operators can get access to large contiguous blocks in Western Finland.
Another change is that the final rules include no band-specific roll-out requirement. The only regulations in this direction include an obligation to initiate operations within 2 years and a requirement that an operator’s own network must cover a minimum of 35% of the service area. Reserve prices reflect those set in the draft; i.e. EUR 23 million for licence A and EUR 21 million for licences B and C. In sum, the rules remained largely intact and thus the three big players are expected to divide the band between themselves. The auction is to start on 26 September 2018.