How 5G spectrum is awarded globally

Big money: A man walks past an advertisement for a 5G smartphone in Seoul. South Korea has reportedly raised US$3.3bil from its 5G spectrum auction. — AFP

THE global multi-billion-dollar race towards developing and deploying the fifth-generation (5G) of wireless technology has been increasingly robust.

Several countries are clearly in the lead compared to others in the 5G battle. South Korea, whose 5G journey began in 2008, is touted as the first country in the world to commercially roll out 5G services nationwide.

The country announced in April 2019 that it finished first in the global 5G race, although this has been disputed by the United States.

While technologically-driven countries have been at the forefront in embracing 5G, the rest of the world have also been gradually opening to this new technology.

According to GSA’s 5G market snapshot for June 2020, a total of 386 operators in 125 countries or territories had announced they were investing in 5G as of end-May this year.

In view of the increased interest, governments have been moving fast to facilitate the deployment of 5G technology. Many countries have adopted the auction approach, which enables the governments to allot 5G airwaves to highest bidders.

While this approach helps governments to raise lucrative proceeds for its coffers, the flipside is auctions may result in higher charges to be paid by end-users as telcos try to recoup their investments.

South Korea’s 5G spectrum auction, which was completed in June 2018, is said to be the world’s first auction for 5G.

The country has reportedly raised US$3.3bil from the auction, with three local telcos acquiring 280MHz of 3.5GHz spectrum and 2,400MHz of airwaves in the 28GHz band.

The three telcos namely SK Telecom, KT Corp and LG U-plus had a 10-block cap per spectrum band. The 3.5 GHz band licences cover a 10-year period and the 28 GHz band licences a five-year term.

Interestingly, the South Korean authorities envisage to nearly double the bandwidth available for use in 5G networks by 2026 under its “5G+ Spectrum Plan”.

If this is achieved, in about six years’ time, an additional 2,640MHz of 5G bandwidth will come into use, on top of the 2,680MHz currently available.

The US via its Federal Communications Commission (FCC) completed its first 5G auction or what has been called as Auction 101 in Jan 2019, effectively raising US$702.6mil through the sale of 28GHz spectrum licences.

In May 2019, Auction 2 was completed, providing licences for the 24GHz band. This round of 5G spectrum auction raised US$2bil in gross bids.

Meanwhile, in March this year, the FCC completed Auction 103, which witnessed the largest amount of spectrum offered in an auction in US history.

Auction 103 offered 3,400MHz of millimetre wave spectrum in the upper 37GHz, 39GHz and 47GHz bands. The auction, which awarded over 14,000 licences, raised a total of US$7.6bil in net bids.

According to FFC chairman Ajit Pai, the three rounds of 5G auctions have made available more spectrum than is currently used for terrestrial mobile broadband by all wireless service providers in the US combined.

“Auction 103 was a tremendous success, and we look forward to building on this positive result with the 3.5 GHz auction, which is scheduled to begin on June 25, and the C-band auction (3.7GHz), which is scheduled to begin on Dec 8, ” Ajit said.

China, which has the world’s biggest mobile phone users, awarded its 5G licences in June 2019 to four operators through direct award.

All the four licensees namely China Mobile, China Telecom, China Broadcasting Network Corp Ltd and China Unicom are state-owned.

Within the Asean region, Thailand is striving to become the first country to be 5G-capable in South-East Asia. The country completed its first 5G spectrum auction in February 2020 and raised US$3.2bil through the sale of 48 licences in the 700MHz, 2.6GHz and 26GHz bands.

Thailand’s largest mobile operator, Advanced Info Service Pcl, snapped up nearly half or 23 of the licences across all three spectrum bands auctioned.

The Singapore government, on the other hand, did not hold an auction and instead, launched a call for proposal for 5G spectrum.

In justifying its decision to not to hold an auction, the city-state’s regulator, the Infocomm Media Development Authority (IMDA), said “the auction mechanism will not be able to bring about the desired policy outcomes in this first wave of spectrum assignment”.

A total of three submissions were received and eventually, two 5G licences were awarded in May this year for the 3.5GHz band.

The winners are Singtel and a joint venture set up by StarHub and M1. They were each allocated 100 MHz of spectrum in the 3.5 GHz band.

In the case of New Zealand, the planned auction for 5G airwaves in May 2020 has been cancelled due to the Covid-19 pandemic.

Instead, the government has announced direct allocation of the 3.5GHz spectrum to three local carriers, offering 40MHz to Dense Air and 60MHz each to Spark and 2degrees.

While prices of the allocations were not disclosed, it is worth noting that the reserve price had previously been set at NZ$250,000 (US$152,279) for each 10MHz lot.

The Covid-19 pandemic is also a reason why the United Kingdom has recently delayed its 5G auction to November 2020 at the earliest. The auction for 80MHz of spectrum frequency in the 700MHz band and 120MHz in the 3.6–3.8GHz bands, was previously set to take place in the spring of 2020.

India is also reportedly planning to delay its 5G auction again to 2021, with the main reason being the failure to attract interest from local major telcos and the Covid-19 outbreak.

The Indian government’s proposed asking price for the 5G spectrum has been criticised for being expensive at a time when the telecom industry faces financial difficulties.

The award of licences was originally supposed to happen in 2019 before it got pushed back to April this year.

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