The 5G auction in Poland: does the COVOD-19 pandemic change anything?
Ten post dostępny jest także w języku: polski
Until 23 April this year, telecommunication operators have the opportunity to submit bids in the first 5G auction in Poland announced at the beginning of March. The sum of asking prices for all band blocks in the auction is PLN 1.8bn. However, in the conditions of the prevailing COVID-19 pandemic, a question arises about the risk of suspending the auction. Such decisions in Europe have already been made in Austria, France, Spain and Portugal.
5G auction in Poland in progress
On 6 March this year, UKE announced an auction for the first frequencies enabling the development of 5G networks in Poland. The auction will cover 4 national reservations of frequencies from the 3.6 GHz band. Each reservation will include a block of 80 MHz wide frequencies and will be valid until 30 June 2035.
According to the auction documentation, the following coverage obligations will be imposed on the winning bidders after the end of the auction:
- Commercial launch of the 5G network in at least one large city by the end of 2020.
- Start up at least 2 800 base stations by the end of 2025. (minimum 700 stations per operator).
- Providing access to the 5G network in all urban areas by the end of 2025.
All four MNOs in Poland are likely to participate in the auction. Orange Polska and T-Mobile Polska are certain of their participation.
Does COVID-19 interfere with 5G auction dates in Poland?
Despite the coronavirus pandemic, the 5G auction in Poland continues and the regulator ensures that everything is going according to plan. On 23 March, UKE issued a communiqué upholding the deadline for submission of initial bids in the auction, at the same time informing that the trial auction and the subsequent auction will take place not earlier than 15 May 2020. However, in a situation of a severe epidemic, the regulator does not rule out short-term suspension of these activities. As the President of UKE, Marcin Cichy, assures, the risk of suspending the auction is low for the time being.
How much money will the telecoms put on the table?
The sum of asking prices for all band blocks in the auction is PLN 1.8bn (PLN 450m for each of the four reservations). The regulator itself expects that about PLN 1.914bn can be received by the state budget from the auction. In turn, the forecasts of Haitong Bank are more optimistic, whose projections assume revenues from the auction at the level of PLN 2bn, and taking the epidemiological factor even at the level of PLN 2.2bn. In a pandemic, the telecommunications market is in a better position than other economic sectors such as trade, automotive or tourism. In this situation, the telecommunications industry is certainly defending its business model based on revenues from cyclical subscriptions. Last year’s and this year’s increases in the prices of telecommunications services are also of great importance, which additionally secure the operators’ ARPU for the next quarters.
More countries in Europe stop 5G auctions
In other European countries, due to the COVID-19 pandemic, market regulators decide to postpone or suspend the 5G auction. These are usually countries where the course of the epidemic has so far been much larger than in Poland. They include Austria, France, Spain and Portugal.