Possible 20% reduction in the price of the 700 MHz 5G auction

The operators are actually fearful about the price that may attain the subsequent spectrum auction in Spain. With accounts deteriorated to the excessive, now they’re requested to make the umpteenth monetary effort. In addition, it’s the 700 MHz band, beforehand occupied by DTT, which is taken into account very important for the future deployment of 5G know-how. This has a higher vary and higher penetration indoors, which can permit higher optimization of future deployments of these new connections. Luckily, plainly the authorities has listened to them and is pondering of reducing the price of the 700 MHz 5G auction by 20%.

The authorities at the time set the beginning price of this auction at 1,170 million euros. Quickly, the operators introduced a number of allegations displaying their dissatisfaction with that prime determine. In February, Roberto Sánchez, Secretary of State for Telecommunications and Digital Infrastructures, already started to make it clear that they didn’t rule out reducing that quantity. Traders have proven contained euphoria as it’s not but official, however plainly the drop in the beginning price is nearer than ever.

They needed to decrease it by 30%, however they will not allow them to

The authorities is conscious of the delicate scenario in the sector. In reality, the Ministry of Economic Affairs, led by Vice President Nadia Calviño, needed to use a reduction of near 30%. This would put the beginning price at round 800 million euros. However, the Ministry of Finance has rejected this reduction and solely agrees to a reduction of 20% of the price initially proposed.

The resolution is just not but agency, however all the steps have been taken to implement it and there have even already been contacts with the operators to convey all this to them. If the beginning price of the 5G auction in the 700 MHz band was lowered by 20%, it could be set at about 900 million euros. This could be removed from the 1,170 million euros that had been initially set.

In reality, nations like the United Kingdom have proven that this can be a price in line with the market scenario. There, in a couple of days they’ve closed the auction for a price decrease than the one which the authorities needed to impose at the outset. Telefónica, which can also be current with O2 in the United Kingdom, will quickly face one other spectrum auction that they hope can be contained in its price.

The Bankinter analysts they think about that with constructive information since the price that was meant to be set “was excessively excessive in the present circumstances given the deterioration that the operators have suffered in current years in their profitability and solvency metrics”.