1. Objective of promoting greater competition in the electronic communications market, helping users gain the maximum benefit with regard to choice, price and quality of service.
2. Measures targeting new entrants include the spectrum reserve and access to national roaming, together with establishing associated coverage obligations to achieve a level of investment that more effectively fortifies the sector’s collective capacity and improves benefits for end-users.
3. Promote an adequate balance between allowing new entities to enter the market, which can implement new business models and diversify offerings, and developing existing operations.
4. The need to bolster levels of coverage where shortcomings exist, particularly in less densely populated areas, to promote social, economic and territorial cohesion, meeting the expectations of the population and national economic sector.
5. Obligations associated with the coverage of low-density municipalities, municipalities of the Autonomous Regions of the Azores and Madeira, and municipalities with low-density parishes can be ensured – with local efficiency gains – through national roaming agreements.
6. Obligation to strengthen the voice service signal, which must reach a signal level that allows coverage considered “Good” across 95% of the national territory by 2025.
7. Definition of priority coverage obligations in providing services compatible with 5G to hospitals, health centres, universities, polytechnic institutes, business and industrial parks, ports, airports and military facilities, notwithstanding the development of 5G in all low-density municipalities. All of these obligations may be met through own, shared or third-party stations by means of wholesale offers.
By determination of 30 October, ANACOM approved the regulation establishing the conditions for accessing the spectrum in the 700 MHz, 900 MHz, 1800 MHz, 2.1 GHz, 2.6 GHz and 3.6 GHz bands that will be provided to the market. It also establishes the procedural rules of the auction and the conditions that will be associated with the use of the allocated spectrum.
At the end of the public consultation deadline, ANACOM analysed and weighed up the 505 contributions received, bearing in mind the objectives and purposes laid out in Resolution of the Council of Ministers no. 7-A/2020 of 7 February (RCM 7-A/2020), which approved the strategy and schedule for distributing the fifth generation of mobile communications.
In this regard, the set of obligations outlined in the regulation took the strategic targets in this Resolution of the Council of Ministers into the utmost account, together with the valuations and weightings under ANACOM's responsibility in the area of spectrum management and in the pursuit of the regulatory principles entrusted to it by law.
The circumstances of the current pandemic were also considered by ANACOM when drafting the final version of the regulation. In an atmosphere of future economic uncertainty, the domestic electronic communications sector may not be affected in the same way as other sectors, and may potentially benefit from market conditions giving it a faster recovery compared to others, in line with what is occurring in other countries. In fact, electronic communications have proven absolutely essential to society and the functioning of the economy. Due to this relevance, they will continue to have an extremely important weight as regards consumption. Furthermore, the pandemic’s economic impact in no way detracts from the need to promote higher degrees of competition in the market, nor the need to strengthen levels of coverage where shortcomings exist, particularly in less densely populated areas.
Having weighed up the circumstances of the pandemic, the objectives and purposes laid out in the above-mentioned Resolution of the Council of Ministers and contributions received in view of the objectives of public interest pursued by ANACOM – which include the need to promote greater competition in the electronic communications market, to help users gain the maximum benefit when it comes to choice, price and quality of service, to encourage the effective and efficient use of the spectrum and to promote social, economic and territorial cohesion – ANACOM made a number of adjustments to the draft regulation.
These changes are aimed at achieving a better balance between allowing new entities to enter the market to implement new business models and diversify offerings, and developing existing operations, while also seeking an improved balance between satisfying the needs of coverage and connectivity in the country on the whole, and the investment commitments required from companies.
Reserve prices and flexible payment terms
ANACOM decided to keep the reserve prices in the draft regulation, totalling €237.9 million for the set of lots (cf. Annex 1), since they were deemed suitable vis-à-vis the economic valuation of the national spectrum and reserve prices in other European countries, which have proved to be significantly lower, on average, than the corresponding final prices.
As regards the planned discount on final spectrum prices in the 900 MHz and 1800 MHz bands acquired by new entrants, having weighed up the contributions of different stakeholders, it was concluded that this was unnecessary, since the spectrum reserve already has a suitable and sufficient entry mechanism.
In the context of the pandemic, and to alleviate the potential impact of the payment of final prices for the spectrum offered in the auction, ANACOM has introduced greater flexibility than that initially planned (option of deferred payment, up to five years, of one third of the final prices for the spectrum allocated in the 700 MHz, 3.6 GHz and 900 MHz bands), by now allowing payment deferral of one half of the final price of all frequency bands and the staggering of the deferred payment over seven years. The term of the guarantee deposit to be submitted by applicants was also shortened to reduce its burden.
New entrants: spectrum reserve, access to national roaming and coverage obligations
In view of its envisaged objectives for promoting competition, ANACOM believed it was appropriate and commensurate to adopt a set of priority measures to facilitate the emergence and development of new operations.
As such, a spectrum reserve has been established in the 900 MHz (limited to 2 x 5 MHz) and 1800 MHz bands for new entrants, ensuring that they may benefit from national roaming when accessing the networks of operators already in place, regardless of the amount of spectrum they acquire. This obligation will remain effective for 10 years. After being in effect for 8 years and within one year prior to the obligation’s expiry, ANACOM intends to evaluate the need for its continuance beyond its initial duration and its respective terms, deciding on any changes arising from this evaluation (cf. Annex 2).
Network access obligations have also been defined for third-party virtual mobile operations, in the different modes that range from full MVNO to light MVNO, for the provision, to end-users, of electronic communication services that are equivalent to those that the mobile network operators offer to their own customers.
Moreover, different coverage obligations have been determined (cf. Annex 3) for new entrants, associated with spectrum acquisition in the 700 MHz band: by the end of 2025, they must ensure coverage of 25% of each highway, each main road route and each rail route included in the Atlantic Corridor, within the national territory, in the Braga-Lisbon link, the Lisbon-Faro link and the urban and suburban links of Lisbon and Porto.
New entrants benefiting from national roaming are subject to a mobile coverage obligation of 25% and 50% of the nation’s population, using frequencies assigned to them for the provision of a broadband service with a minimum debit of 30 Mbps, respectively, within three and six years of entering into the respective agreement.
These obligations are considered suitable for new entrants, allowing them to ensure an investment level that more effectively fortifies the sector’s collective capacity and improves benefits for end-users.
Relaxing of coverage obligations to prioritise the country’s economic, social and territorial cohesion
In this regard, the objectives are to mitigate existing shortcomings of mobile networks in coverage and capacities, and to ensure the country’s economic, social and territorial cohesion, meeting the expectations of the population and national economic sector. National objectives are also safeguarded for mobile broadband under the Digital Agenda for Portugal and the National Programme for the Spatial Planning Policy (NPSPP) and Resolution of the Council of Ministers no. 7-A/2020, together with European objectives for a “Gigabit Society”.
Under the circumstances of the current pandemic, several adjustments to plans have been made, namely involving coverage obligations associated with the 700 MHz band, with some having been rescheduled and others relaxed, while upholding the priority of those involving low-density areas and the Autonomous Regions of the Azores and Madeira, together with municipalities with low-density parishes that have now been included as well.
Of particular note is the coverage obligation of 75% (by the end of 2023) and 90% (by the end of 2025) of the population of each of the parishes classified as low-density and each of the parishes of the Autonomous Regions of the Azores and Madeira. Moreover, the coverage obligation for the population of each of the parishes not classified as low-density, but belonging to municipalities with low-density parishes, is 70% (by the end of 2024), and 90% (by the end of 2025) (cf. Annex 4).
There is also the obligation to ensure, by the end of 2025, coverage:
- of 95% of the total population of the country, each highway, the metro networks of Lisbon, Porto and Sul do Tejo and each of the rail routes included in the Atlantic Corridor, within the national territory, in the Braga-Lisbon link, the Lisbon-Faro link and the urban and suburban links of Lisbon and Porto;
- of 85% of each main road route, of National Road 1 and National Road 2 and each of the remaining rail routes.
Note that these obligations, generally speaking, will achieve the strategic targets laid out in RCM 7-A/2020.
In view of the need to leverage the digital skills of the population, economic growth, social inclusion and the competitiveness of the country and all of its regions, without losing sight of the investment levels that may be associated with 5G, ANACOM believes that the obligations associated with the coverage of low-density municipalities, municipalities of the Autonomous Regions of the Azores and Madeira and municipalities with low-density parishes can be ensured – with local efficiency gains – through national roaming agreements.
Relaxing of network development obligations to address national strategic targets
Network development obligations associated with the 3.6 GHz band have been adjusted vis-à-vis the original plan, namely by offering greater flexibility and by addressing the national strategic targets laid out in RCM 7-A/2020 (cf. Annex 5).
The regulation’s scope allowed and will allow the coverage for one coastal city and for another city in a low-density territory, per the objective of RCM 7-A/2020. However, since this procedure was ultimately impacted by the Coronavirus pandemic, achieving this objective in 2020 through this means will not be possible. Note, however, that a number of technical tests are in progress, and may achieve these coverages in the very short term after the allocation of frequency usage rights.
The coverage targets laid out in RCM 7-A/2020 for hospitals, health centres, universities, polytechnic institutes, business and industrial parks, ports, airports and military facilities are addressed by the obligations of the regulation, which will result in the provision of services compatible with 5G to these entities.
In fact, at the end of the auction, operators having 50 MHz or more spectrum in the 3.6 GHz band will have to install base stations at the entities who so request, from among a list of the entities in question, and submitting a proposal addressing these requests will not be their only obligation. In return, the base stations installed in the wake of these requests, and within the established deadline, will be counted towards fulfilling the obligation of installing base stations throughout the country, thereby making the obligation less burdensome than the one found in the draft regulation.
Also of note are the obligations to install base stations in low-density municipalities and in municipalities with more than 50,000 inhabitants.
In view of the targets laid out in RCM 7-A/2020 with regard to municipalities, it is believed that a small number of mandatory base stations should be installed in municipalities with more than 50,000 inhabitants not coinciding with those of low density or the Autonomous Regions. This is an important change for the municipalities in question, ensuring a broader distribution of base stations and, consequently, of the potential ensuing benefits of providing services compatible with 5G. For operators, the additional burden will be minor, given the limited number of municipalities in question (59), primarily comprising high-density urban areas where demand is expected to be higher.
In accordance with the regulation, the obligations to install base stations in the municipalities in question at the request of the entities under consideration may be met through own, shared or third-party stations by means of wholesale offers. The base stations to be installed should allow the provision of services compatible with 5G, namely ultra-high speed band services (eMBB) with a view to gigabit connectivity, low latency (URLLC) or massive Machine-Type Communication (mMTC) services.
Obligation to strengthen the voice service signal
At the end of the auction, current operators having 2 x 10 MHz in the 700 MHz band will be subject to an obligation to strengthen the voice service signal, which must reach a level of signal that allows coverage considered “Good” across 95% of the national territory by 2025.
In summary, the choices made by ANACOM in this regulation result from an assessment of the costs to be incurred by the holders of frequency usage rights in fulfilling their associated obligations, coupled with their ensuing benefits, not only on behalf of the users of electronic communication networks and services, but also citizens and the country at large, considering the promotion of competition, social, economic and territorial cohesion, and domestic market development through improved networks and services that have proven to be essential in the current context of the pandemic.
By approving this regulation, ANACOM will update the indicative schedule for carrying out the auction, anticipating that the procedures for allocating frequency usage rights can be finished during the first quarter of 2021.
- Approval of Auction Regulation for the allocation of frequency usage rights in the 700 MHz, 900 MHz, 1800 MHz, 2.1 GHz, 2.6 GHz and 3.6 GHz bands https://www.anacom.pt/render.jsp?contentId=1574202
- Consultation on the draft Regulation of the Auction for allocation of frequency user rights in the 700 MHz, 900 MHz, 1800 MHz, 2.1 GHz, 2.6 GHz and 3.6 GHz bands https://www.anacom.pt/render.jsp?contentId=1508701
- Regulation no. 987-A/2020, of 5 November https://www.anacom.pt/render.jsp?contentId=1573881