On 16 December 2021, the Public Utilities Commission (PUC) will organise an auction for mobile operators regarding the deployment of the 5G network in the 700 MHz band. The auction will offer the right to use three main bands for 20 years (until 31 January 2042), as well as the right to use two additional bands (from 1 February 2025 to 31 January 2042). The starting price for the main band will be 2.2 million EUR, but for the additional band - 150 thousand EUR. The amounts offered by the winners of the auction will go to the state budget.
Alda Ozola, the PUC’s Chair, points out: "In the twenty years since the establishment of the PUC, we have organized ten radio frequency auctions. This time, several main bands and additional bands in the 700MHz spectrum will be auctioned. This frequency band is important for the development of 5G network, as well as electronic communications network services and competition in Latvia. The benefits will be felt by users, as well as other electronic communications merchants, receiving faster internet download speeds and better coverage in the country”.
Andris Virtmanis, Director of the PUC’s Electronic Communications and Postal Department, explains that several considerations were taken into account when determining the starting price of the auction, including the number of main bands and additional bands, frequency usage options, territory of usage rights, the pricing criteria of the auctions previously organized by the PUC, the starting price per capita in other countries, as well as the introduction of the main radio frequency bands as soon as possible. To achieve those objectives, it was essential that the starting price should not be an obstacle to participation in the auction and to the acquisition of rights to use radio frequencies.
The prepared auction decision contains several conditions for the use of frequencies and the conduct of the auction. For example, the auctioned main bands will be available for both download and upload, while the additional bands will only be available for data download.
Each participant will be able to obtain one main band and one or two additional bands. According to the auctioned spectrum, the winner will be obliged to invest in the development or improvement of the electronic communications network.
Only those companies which are not related companies will be able to participate. Namely, two or more commercial companies, where the participation of one merchant in the other commercial company directly or indirectly makes up at least 30% of the paid-up share capital, will not be able to participate.
The auction will be organised remotely on 16 December 2021 at 10 am, using special software and technical equipment issued by the PUC and configured to ensure the auction.
To hear the opinion of potential participants of the auction, the PUC organized several consultations for the development of the auction regulations and consultations with market participants, as well as a hearing during which the PUC presented the proposals received in the consultation and the PUC’s opinion thereon. The decision announcing the auction is available on the PUC website.