ComReg launches 4G mobile licence award process

29 May 2012

Ireland’s telecoms regulator the Commission for Communications Regulation (ComReg) has published its response to consultation and information memorandum concerning the forthcoming auction of licences for high speed fourth-generation (4G) mobile services. Information Notice 12/53 details the watchdog’s plans to auction off spectrum rights to use three ‘critical’ bands – 800MHz, 900MHz and 1800MHz covering the period 2013 to 2030 – with ComReg noting that the first two named bands are, in particular, ‘highly suitable for advanced mobile services, due to their excellent propagation properties which allow for high quality services and wide area coverage plus improved in-building reception’.

In total, the regulator will auction off 280MHz of sub-2GHz spectrum (i.e. 140MHz of paired spectrum), more than double the amount currently licensed in these bandwidths. The watchdog sees the move as ‘vital’ in the development of next generation advanced mobile services in the Republic, which it hopes will be made available to consumers and businesses from 2013.

The publication of the information memorandum marks the official launch of the award process proper, ComReg says, during which time interested parties are invited to submit questions on its allocation plans. The watchdog will also hold practice auctions for each of the qualified bidders, it said. The deadline for submissions of formal applications and deposits is Friday 20 July 2012. ComReg has set a minimum price of EUR20 million (USD25.1 million) per block of 2×5MHz sub-1GHz spectrum, and EUR10 million per lot of 2×5MHz of 1800MHz spectrum. All licences will be valid for 15 years.

Finally, ComReg notes that the primary features of the 4G licence award process are as follows:

- To accommodate the expiry dates of current GSM licence assignments, spectrum rights of use will be auctioned across two time periods, applicable to each of the three bands being auctioned. It is intended that the first period will run from 1 February 2013 to 12 July 2015 and the second period will run from 13 July 2015 to 12 July 2030;

- If ComReg receives bids for the exact quantity of spectrum that is available (or bids for less than the quantity of spectrum available), these bidders will acquire spectrum at the minimum price;

- If there is excess demand, and an auction is therefore required, it will be a combinatorial clock auction, meaning that it allows bidders to make packaged bids over multiple rounds of bidding within a prescribed timeframe;

- The winners of spectrum will be those who make the highest bids (consistent with the rules of the auction);

- The first phase of the auction will determine the quantity of spectrum that a winning bidder is awarded and the second phase will determine the exact frequencies within the spectrum bands;

- The second stage of the auction will be a single round of bidding during which winning bidders in the first stage may submit one or more bids, in order to be assigned specific frequencies within the bands in which they have won generic lots.

In order to safeguard market competition, ComReg is placing limits on the maximum amount of spectrum any single bidder can acquire, either on its own or working in partnership with other bidders. The regulator says that the minimum reserve prices set are based on ‘a conservative lower bound of an internationally benchmarked level’. Those companies which win 4G spectrum in the auction will be required to pay a portion of their payment up-front, with the remainder to be paid off annually in instalments over the duration of the licence.