ComCom maintains overall award of mobile spectrum
Bern, 31.05.2011 - The Federal Communications Commission (ComCom) is maintaining its intention to award all of the mobile radio frequencies which will become free in the next few years in a single auction. It had already launched the corresponding invitation to tender in November 2010. Since then, ComCom has completed its examination of all the changes requested by various interested companies. It will modify some points in its invitation to tender and will extend the deadline for candidatures for the auction to the end of September. The auction will be held in the first quarter of 2012.
After detailed scrutiny, ComCom has come to the conclusion that awarding of all mobile frequencies in a single auction is the most advantageous solution. This gives all interested parties an opportunity to purchase a future-proof, full frequency portfolio and will bring long-term planning security. A phased allocation of frequencies, as suggested by individual operators, would increase complexity and would consequently increase uncertainty for operators. A phased auction could also delay introduction of the latest mobile radio technology (LTE) and Switzerland would fall behind in terms of technological development. In addition, a phased auction would a priori reduce the probability that any newcomers would acquire frequencies and enter the market.
Amendments to the invitation to tender
ComCom will, however, take into account some requests made by potential candidates. For example, ComCom now envisages a deadline of the end of 2014 – or in the cities of Basel and Geneva the end of 2015 – for conversion work in the 900 and 1800 MHz frequency bands. Furthermore, additional bidding restrictions (spectrum caps) will prevent one operator from acquiring more than half of all duplex frequencies important for network-construction. The combined spectrum cap for the very attractive 800 MHz and 900 MHz frequency bands will be reduced slightly to take into account the operators' continuity risk. The amount of the bank guarantee to be lodged will be reduced to 50% of the minimum bid for the frequencies applied for. OFCOM will publish the amended tender documents on its website at the end of July.
Award by auction
By means of the new allocation of mobile spectrum, it is ComCom's wish to ensure an optimal, future-proof allocation of frequencies, in the interests of competition. The auction format is designed so that both the number of licences and the available bandwidth are not predetermined by ComCom but are in principle open. Ultimately, the market will decide on the allocation of frequencies. The award is technology-neutral, so that also the latest mobile technologies such as LTE (Long Term Evolution of UMTS) can be deployed. The early allocation of frequencies and a utilisation period extending up to the end of 2028 will enable licensees to plan for the long term and make their investments on a solid basis. ComCom and OFCOM will take into consideration various concerns of the interested companies when defining the definitive rules for the auction. In-depth training of bidders and a test auction will be an integral part of the award process.
Both the existing mobile radio licensees (In&Phone, Orange, Sunrise and Swisscom) and any new operators who wish to participate in the auction have until 30 September to submit a candidature dossier to OFCOM. In this they must specify the maximum amount of spectrum they wish to purchase in the individual bands. They must also submit a bank guarantee amounting to 50% of the minimum bid for the requested frequencies and show that they can comply with the legal licensing requirements and the specific obligations of the tender. If a candidate meets the requirements, it will be authorised by ComCom to participate in the auction.
It is planned to hold the auction in the first quarter of 2012 and to award the licences thereafter. In order to prevent possible collusion and agreements between bidders, ComCom will not announce the names of the candidates, the winners, the acquired spectrum and the award price until after the auction ends.
Address for enquiries
Secretariat of ComCom
Marc Furrer, ComCom President
phone +41(0)31 323 52 90