The deadline for the submission of tenders for the auction of the 5G and other relevant bands ends this Friday, 27 November 2020. All qualifying entities may apply for this spectrum allocation procedure, which seeks to promote greater competition in the electronic communications market, helping users get maximum benefit regarding choice, price and quality of service.
This spectrum allocation is also intended to strengthen the levels of coverage where there are deficiencies, particularly in less densely populated areas, promoting social, economic and territorial cohesion, meeting the expectations of the population and of the national economic fabric.
To pursue these objectives, ANACOM established a set of rules aimed at an adequate balance between ensuring market entry conditions for new entities, which can implement new business models and more differentiated offerings, and the development of the existing operations. The measures adopted in the Regulation, in addition to being suitable, proportional and needed to create conditions for new operations to appear on the market, are also intended to overcome or mitigate some of the disadvantages to which new entrants are naturally subject.
The measures adopted in the Regulation are suitable, proportional and necessary to create conditions for new operations to emerge on the market. These are measures that are usually adopted in several member states and that fall within the nature of the system and do not result in an advantage. On the contrary, they are intended to overcome or mitigate some of the disadvantages faced by new entrants. This includes spectrum reserve and access to national roaming, along with the definition of coverage obligations for new entrants to achieve a level of investment that more effectively fortifies the sector’s collective capacity and improves benefits for end-users.
Spectrum reserve is one of the tools that can be used by the Regulators to foster effective competition in mature markets, because this is the only way to promote desirable results for users and for the Portuguese economy as a whole. In addition to Portugal, there are other member states that have deemed this measure necessary to pursue the regulatory objectives: Belgium, Czech Republic, France, Netherlands, and Slovenia. Moreover, the European legislator itself pointed out in Decision No. 243/2012/EU of the Parliament and of the Council of 14 March 2012 that the allocation of bands for new entrants (as well as other mechanisms for positive discrimination of new entrants) is one of the tools that can be used by the Regulators to foster effective competition in the mobile communications market. And this thinking remains current in Article 52 of the EECC.
Regarding national roaming, which will always be provisional, it does not create a competitive advantage over the operators that have to grant such access and are duly compensated for it. This is a regulatory measure to ensure a “level playing field”, which would be impossible without this mechanism for network access, and which enables rebalancing the base conditions that enable effective competition. This is not a new measure. It was part of the 4G auction regulation in 2011, and several EU countries, such as Germany, the Czech Republic and Slovakia, have already imposed obligations regarding network access. It should be noted that the fact that there are network access obligations does not mean that the new entrant does not have to make investments. There will always be investment by the new entrant, which will vary according to the adopted business model and to the way in which it intends to position itself in the market.
Even when it is possible to enter into national roaming agreements, which will have to be negotiated with the operators that are required to grant access to the network, there will be investment because, in this case, the entrants must cover 25% and 50% of the population with the frequencies assigned to them within three and six years of signing the agreements, respectively.
A new entrant that wants to be a competitor with a market share that can begin to approach that of existing competitors will have to acquire spectrum usage rights for bands in which it will be subject to obligations, as is the case with operators already on the market.
Even if they opt for smaller, niche or local operations, new entrants acquiring spectrum in the 700 MHz band are required to cover 25% of highways, main road routes, and rail routes included in the Atlantic Corridor, in the part concerning national territory, the Braga-Lisbon link, the Lisbon-Faro link, and the urban and suburban links of Lisbon and Porto.
Regarding the obligations established for the current operators, which are higher, they meet the levels of coverage that they have already reached in the country, and which are already high in many parts of the territory. In addition, in many of the low-density areas, they already have obligations that bind them to provide data services with speeds of around 30 Mbps or even higher. Nevertheless, there are many locations with important coverage gaps, where mobile services are not provided with the quality that enables adequate connectivity, so it is of crucial importance to provide the country and all its regions with increased levels of coverage, not forgetting the most remote ones. Therefore, conditions have been created to reduce the burden associated with the obligations, assuming that roaming agreements are carried out in the low-density municipalities, in the autonomous regions of Madeira and Azores and in municipalities with low-density parishes. These agreements, and other infrastructure sharing arrangements, are an important tool for efficient network implementation.
The Regulation seeks to promote effective entry into a highly concentrated market, always within a framework where proportionality is weighted. Since 1998, when there were three million mobile phone users, no operator with its own network has entered the mobile market. There are also three MVNOs (two of which belong to the same group), which together have less than 3% share of a market that now has 12 million actual users.
