December 2019 – The 5G rollout is a hot topic throughout Europe, with the anticipated deployment due shortly, and availability in the EU expected from 2020. The 5G infrastructure will open up a wide range of new possibilities in a variety of sectors, including manufacturing, health, energy, automotive, media and entertainment.
This analysis provides an overview of the status of 5G deployment and the tenders of frequencies suitable for 5G technology in the following Kinstellar Jurisdictions: the Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Serbia, Turkey, Ukraine, Kazakhstan and Uzbekistan.
Status of 5G Auction
Expected date of auction
Expected date of 5G frequencies allocation
3.6-3.8 GHz frequencies were allocated in 2017.
Auction for 700 MHz and 3.5 GHz frequencies is expected to be announced in January 2020.
3.5-3.7 GHz frequencies were allocated in 2017. 3.4 and 3.6 GHz frequencies were allocated in 2015.There is no specific date for the formal announcement of the 700 MHz frequencies auction.
By the end of June 2020
No expected date of allocation
Auction for 700 MHz, 2100 MHz, 2600 MHz and 3600 MHz frequencies started on 18 July 2019.
Three of the current mobile operators have been registered for the auction: Magyar Telekom Nyrt., Telenor Magyarország Zrt. and Vodafone Magyarország Mobil Távközlési Zrt. The fourth participant Digi Communications N.V. has not been registered due to a failure to meet the eligibility criteria.
The bidding phase did not start as planned due to an appeal by Digi.
No expected date of allocation
Auction of 700 MHz, 800 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz frequencies is expected to take place in the first half of 2020.
No further information on when such a procedure is expected to be finalised or when the operators will be able to begin providing 5G technology in Romania.
First half of 2020
No expected date of allocation
Local telecoms use 100 MHz of the 3.6 GHz frequency for testing 5G technology in multiple points across the country.
The 700 MHz frequency is currently held by the army, but is expected to be released in May 2020. An auction is expected to take place soon thereafter, possibly by the end of the second half of 2020.
Second half of 2020
No expected date of allocation
No auctions have been announced yet.
Second half of 2020
No 5G spectrum auctions will take place in Turkey. When the current operators renew their infrastructure, 5G will automatically be used (without selecting a new service provider).
Ukrainian regulator announced that 3.5 – 5 GHz; 24.5 – 31 GHz; 70-80 GHz frequencies will be allocated for 5G in 2020.
Due to the lack of available frequencies, especially in Ukraine’s regions, the regulator does not expect to hold any auctions prior to 2020. 4G auctions were conducted in 2018, and most operators are unwilling to invest new technologies so soon after this.
Kazakhtelecom’s CEO proposed a single 5G infrastructure owner scheme in 2018.
No public announcement of an auction. Two state-backed telecommunications companies (Uzmobile and Ucell) tested 5G networks in September.
Below is a summary of recent updates concerning 5G auctions in Central and Eastern European and Central Asian countries.
On 26 June 2019, the Czech Telecommunication Office (CTO) published the proposed terms for a planned auction of 5G frequencies in the 700 MHz and 3.4–3.6 GHz frequency bands and invited stakeholders to participate in a public consultation. Within the 30-day public consultation period 16 stakeholders submitted their comments on the proposed terms, which were then considered by the CTO. Following the public consultation, the terms are subject to consultation with the Czech Competition Authority and the European Commission.
A formal announcement of the 5G auction should be made in late January 2020, with the auction itself taking place in April 2020. Under this scenario, the 5G frequencies would be allocated by July 2020. However, the proposed schedule may be subject to further changes.
The CTU has announced minimum prices for the auction blocks, which amount to CZK 6.3 bn (approx. EUR 247.35 million) in total. The auctioned frequency licences will last from 12 to 15 years.
Block allocation of the 2x10 MHz spectrum in the 700 MHz frequency band will be reserved exclusively for new operators in order to attract new market entrant(s). In order to ensure that the new providers will be able to offer competitive services prior to establishing their own networks, current operators applying for the 700 MHz frequency band will be required to commit to provide national roaming services to any new operator successfully bidding in the upcoming auction.
To ensure the effective use of the auctioned frequencies, CTO has proposed several development criteria that the participants must meet, including an obligation to promote territorial high-speed internet coverage.
3.6-3.8 GHz frequencies, which are suitable for 5G technology, were allocated in 2017. Licenses were acquired by four bidders including Nordic Telecom 5G a.s., O2 Czech Republic a.s., PODA a.s. and Vodafone Czech Republic a.s.
On 26 August 2019, the Slovak Regulatory Authority for Electronic Communications and Postal Services (RÚ) published the proposed terms and conditions for the planned auction of 5G frequencies and invited stakeholders to participate in a public consultation. Within the 21-day public consultation period stakeholders submitted their comments on the proposed terms; the three largest Slovak operators consider a reservation of 20 MHz frequencies for the Slovak Police Force for communications between unmanned aircraft (drones) and their control centres as problematic. Following the public consultation, the terms are subject to consultation with the Slovak Competition Authority and the European Commission.
There is no specific date for the formal announcement of the 5G auction, but the auction itself should take place by the end of June 2020. RÚ considers an international comparison of the announced prices in other EU Member States in which auctions for specific frequencies were successfully carried out as the most appropriate way of setting a minimum price. Individual authorisations for the 700 MHz frequency licences and for the 1500 MHz frequency licences will be valid until the end of 2035.
RÚ is considering four different types of tender conditions for the 700 MHz and 900 MHz frequency bands. The differences between these are in the frequency / auction limit or in the allocation of an auction block to the operator not holding frequencies in the frequency bands below 1 GHz. To ensure the effective use of the auctioned frequencies, RÚ has proposed several development criteria that the participants must meet, including an obligation to promote territorial high-speed internet coverage.
Licences in the 3.5 GHz and 3.7 GHz bands suitable for 5G technology were already assigned in 2017. Licences in the 3.4 and 3.6 GHz bands were assigned in 2015.
In Hungary, the formal commencement date of the 5G auction in the 700 MHz, 2.1 GHz, 2.6 GHz, 3.6 GHz frequency bands was 18 July 2019. Following the completion of the necessary investigations, on 13 September 2019, the Hungarian Media and Communications Authority formally registered three applicants. According to the official register, these applicants are the current largest mobile service providers in Hungary, namely Telekom Hungary, Telenor Hungary and Vodafone Hungary. The fourth participant, Digi Communications N.V., was not registered in the auction due to a failure to meet the eligibility criteria. Digi Communications N.V. subsequently filed an appeal against this decision, but the regulator upheld the result of the formal investigation procedure in its order of 27 November 2019. Digi now has the option to challenge the decision before the courts and according to press information, it intends to do so. In this case, the court may further suspend the auction on request.
As originally planned, the applicants would have been able to bid from 23 September to 11 October. However, the bidding phase could not commence as a result of the appeal by Digi.
The starting price of the auction is HUF 5 billion (approx. EUR 15.2 million) for the 700 MHz frequency band, HUF 4 billion (approx. EUR 12.2 million) for the 2100 MHz frequency band, HUF 1 billion (approx. EUR 3 million) for the 2600 MHz frequency band and HUF 1.5 billion (approx. EUR 4.6 million) for the 3600 MHz frequency band.
The 700 MHz frequency radio system will be operational as early as 6 September 2020. With respect to the other sold frequencies, the basic blocks can be put into use once the necessary frequency usage rights have been obtained.
Based on an official statement by the regulator, the four frequency bands will be granted for 15 years, with an option for an additional five-year renewal.
In the meantime, Vodafone Hungary has already launched its commercial 5G service in Budapest thanks to its existing frequency set in the 3.5 GHz band in central Budapest.
On 29 July 2019, the Romanian Authority for Communications Management and Regulation (ANCOM) published the public documentation for the competitive selection procedure for granting the rights to use radio frequencies in the 700 MHz, 800 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands. Such documentation (which includes the tender rules) was subject to a public consultation procedure which ended on 2 September 2019.
The Romanian Minister of Communications and Information Society initially announced that the implementation of 5G technology in Romania was expected to begin in 2020, while the tender for the allocation of new frequencies would likely be finalised by the end of 2019.
However, during a press conference held at the end of October 2019, ANCOM management announced that the auction of the radio spectrum required for the implementation of 5G technology in Romania would take place during the first half of 2020. According to ANCOM management representatives, the main reasons for the implementation delay are: a lack of a set of instruments regarding network security requirements, the necessity to implement the Memorandum signed between the Romanian Government and the US Government, as well as the necessity for the future government – which will draft the 2020 budget – to approve the 5G licence fees and their payment schedule.
The rights to use the frequency spectrum of the 700 MHz and 1500 MHz bands, for which there has so far been no allocation, will have a validity period of 15 years, starting on 1 January 2021 for the 700 MHz band, and 1 January 2020 for the 1500 MHz band. The other auctioned frequency licences will have validity periods between 6 and 10 years.
ANCOM expects to obtain at least EUR 580 million from the sale of 5G licenses, which is much lower than the initial forecasts (of around EUR 1 billion).
The winners of the auctions must pay the value of the licenses within two weeks from the moment they are announced. However, ANCOM also announced that it will submit to the Government its proposal for allowing the operators to pay the fees in instalments and over a longer period of time.
The proposed terms for the planned auction, as well as other related documents, are available on ANCOM’s websites (the particular information on 5G auctions is only available in Romanian; however, some sections of the ANCOM website are also in English): http://www.ancom.ro/formdata-269-49-377
Selected 5G frequencies were already tendered out in Bulgaria over the past three years, and the top three local telecommunications operators – A1, Telenor and BTC – are already running tests, hoping to roll out 5G services during the course of next year. According to public sources, they are testing 5G technologies on multiple points across the country in the 3.6 GHz frequency spectrum.
The main obstacles facing the telecommunications companies relate to the availability of the key frequency bands and also the associated costs.
The Bulgarian government currently holds the lower frequency bands. Based on media reports, the Chairman of the Bulgarian Communications Regulation Commission has given indications that the 700 MHz spectrum will be released by May 2020. Tender procedures are expected to follow shortly thereafter.
Given that local telecommunications companies are still investing in 4G, the Bulgarian telecommunications regulator has proposed a significant decrease in the associated fees by as much as 50%. It is envisaged that this would free up sufficient financial resources for the companies to invest in the new technology. While this proposal is currently on the agenda of the Bulgarian government, public sources indicate that the telecommunications regulator will face resistance from the Ministry of Finance and from the Ministry of Defense.
The Strategy for the Development of New Generation Networks by 2023, adopted in April 2019, promotes the use of cloud computing and the Internet of Things, as well as the development of fifth generation (5G) mobile systems.
The Serbian Minister of Trade, Tourism and Telecommunications was quoted in numerous press releases and articles stressing the important role that Huawei will play in the process of development of 5G, based on the Memorandum of Development of Information Silk Road, signed between China and Serbia. Huawei has already partnered up with Telenor, as in June 2019 Telenor opened the first 5G base station in Serbia in the Science-Technology Park Belgrade, where “national and foreign companies, start-ups and students of technical faculties may work on developing solutions for the technology of the future”. On the other hand, the state-owned mobile operator MTS apparently seeks to conduct testing of 5G services with Ericsson. In June, the head of Serbia's telecommunications regulator RATEL said it plans to complete the preparation of the legal framework for the launch of a 5G frequency auction in 2020. The Minister also announced that the plan is to launch the auction process itself in the second half of 2020.
A 5G-related “New Generation Communication Technologies” signing ceremony was held in Ankara in June 2018 by the Ministry of Science, Industry and Technology, the Ministry of Transportation and Infrastructure and the Information and Communication Technologies Authority. The project is supported by the Scientific and Technological Research Council of Turkey (TÜBİTAK) and 17 companies under the Cluster of Communication Technologies (Haberleşme Teknolojileri Kümelenmesi) in order to bring all communication systems to the market as local products.
5G is considered as an investment worth approximately TL 253 million (approx. EUR 40 million) and will be supported by Türk Telekom, Turkcell and Vodafone Turkey. It has been announced that the upon the renewal of the infrastructure of these current operators, 5G will be available in Turkey. Therefore, no auction of the 5G spectrum will take place.
The Information and Communication Technologies Authority (BTK) approved 5G trials in Istanbul, Izmir, and Ankara in February 2019, and the tests will be carried out by the end of 2019.
In November 2019, the Deputy Minister of Ukraine for Digital Transformation confirmed that 5G internet will be launched in Ukraine no earlier than 2022 - a statement supported by the major mobile telecom providers. Similar to the majority of EU countries, 5G will use frequencies in the range from 700 MHz, 3,4-3,8 GHz and 27 GHz.
The Ministry is expected to come up with a relevant plan in December 2019 for the release of the required frequencies. It is not yet clear when the first frequency allocation tenders could be held. The Ukrainian State Centre of Radio Frequencies, responsible for the tendering process, has not yet made any announcements.
Most market experts confirm that at present, Ukrainian operators are preoccupied with implementation of 4G technology, and installing 5G is not a priority in 2020. During the Swedish-Ukrainian Business Forum in May 2019, 5G was demonstrated as part of a test by the Turkish-owned telecom operator Lifecell in collaboration with Ericsson at a speed of 25.6 Gbps.
No information on a potential 5G auction.
5G was tested in the cities of Nur-Sultan (the capital of Kazakhstan) and Almaty and is being tested in the city of Shymkent. The Ministry of Digital Development, Innovations and Aerocosmic Industry recently announced that 5G will initially be launched in a few areas in Nur-Sultan by the end of 2021 followed by other locations in 2022. 5G will be launched across the regions of the main cities in 2023 and is considered necessary for development of smart cities.
The Uzbek government’s interest in 5G networks was announced during a visit by the President of Uzbekistan to China in April 2019. On June 10, the Ministry for Development of Information Technologies and Communications invited network operators to submit proposals on 5G network deployment. However, the Ministry provided no details on the current status of the project, and no other information is publicly available. In September 2019, certain mainstream media sources reported that two state-owned mobile network operators have conducted tests of 5G equipment, and that Uzbekistan plans to deploy 5G networks in 2020.
For further information, please contact Zdeněk Kučera, Managing Associate & Co-Head of firm-wide TMT practice, at , or Štěpánka Havlíková, Junior Associate, at .
Experts from the following Kinstellar offices contributed to this update: Nur-Sultan - Almaty | Kazakhstan; Belgrade | Serbia; Bratislava | Slovakia; Bucharest | Romania; Budapest | Hungary; Istanbul | Turkey; Kyiv | Ukraine; Prague | Czech Republic; Sofia | Bulgaria; Tashkent | Uzbekistan.
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