5G RACE

L'Opinion - - The Wall Street Jour­nal - Stu Woo

“If you don’t have spec­trum, you can’t pro­vide wi­re­less ser­vice,” said Steve Blythe, who heads spec­trum stra­te­gy for Orange, a French car­rier that ope­rates throu­ghout Eu­rope and Afri­ca.

Car­riers say 5G net­works will be made up of loads of small an­ten­nas much more den­se­ly pa­cked in­to po­pu­la­ted areas. Those an­ten­nas will need to ope­rate over dif­ferent fre­quen­cies than those used in today’s net­works. Ge­ne­ral­ly, sought-af­ter band­width will be ca­pable of trans­mit­ting more data, but over shor­ter dis­tances.

Go­vern­ments in each coun­try ty­pi­cal­ly hold auc­tions to lease chan­nels of air­waves to wi­re­less car­riers, and pro­ceeds go in­to go­vern­ment cof­fers.

Cel­lu­lar pro­vi­ders are clo­se­ly wat­ching auc­tions even in coun­tries where they don’t have a pre­sence. In ad­di­tion to trying to lock in rights to the spec­trum, car­riers al­so can learn bid­ding stra­te­gies and lob­by re­gu­la­tors on what they consi­der to be the best auc­tion rules.

Wi­re­less auc­tions al­rea­dy va­ry wi­de­ly in terms of how they work around the world, and the heigh­te­ned in­ter­est in 5G has drawn ex­tra scru­ti­ny to some. In the Ita­lian auc­tion that en­ded Tues­day, the go­vern­ment rea­ped more than double the re­ve­nue it had fo­re­cast, dra­wing cri­ti­cism from one pro­minent car­rier.

Four wi­re­less car­riers es­sen­tial­ly bought 200 chunks of air­waves that they co­ve­ted for 5G net­works. But ins­tead of auc­tio­ning off in­di­vi­dual pa­ckages, the Ita­lian go­vern­ment said wi­re­less car­riers had to buy one of four big bundles. Two bundles fea­tu­red 80 chunks of air­waves each, and two pa­ckages had 20 chunks each.

Bid­ding for the two lar­ger pa­ckages was fierce. In the end, the car­riers spent €6.55 bil­lion ($7.55 bil­lion) in the auc­tion – more than double the €2.8 bil­lion the Ita­lian go­vern­ment had writ­ten in­to its bud­get.

Vo­da­fone, which ope­rates in more than 20 coun­tries and is the world’s No. 2 wi­re­less car­rier by sub­scri­bers, won one of the 80-chunk pa­ckages, spen­ding €2.4 bil­lion in the ove­rall auc­tion. But the high price it for­ked over cau­sed grum­bling at the Lon­don head­quar­ters.

“Auc­tions should be de­si­gned to ba­lance fis­cal re­qui­re­ments with the need for in­vest­ment,” said Vo­da­fone Chief Exe­cu­tive Nick Read, in a sta­te­ment. He war­ned against fu­ture “ar­ti­fi­cial auc­tion constructs.”

A spo­kes­man for Ita­ly’s mi­nis­try of eco­no­mic de­ve­lop­ment, which conduc­ted the auc­tion, de­cli­ned to com­ment. Eu­ro­pean wi­re­less exe­cu­tives said they be­lie­ved the auc­tion’s cost was an out­lier com­pa­red with other coun­tries be­cause both Ita­ly’s go­vern­ment and wi­re­less in­dus­try face unique cir­cum­stances.

Eric Syl­vers in Mi­lan contri­bu­ted to this ar­ticle

SI­PA PRESS

People using their smart­phone on a sub­way plat­form in New York. De­mand for 5G air­waves, or spec­trum, even in this ear­ly stage, is hea­ting up.

Newspapers in French

Newspapers from France

© PressReader. All rights reserved.