COMMUNICATION on public consultation on draft Invitation to Tender for Granting of the Rights to Use Radio Frequencies to Provide Electronic Communications Networks in the 700 MHz and 3440–3600 MHz Frequency Bands

On 16 March 2020, the Czech Telecommunication Office (CTU) announced a public consultation to submit comments on draft Invitation to Tender for Granting of the Rights to Use Radio Frequencies to Provide Electronic Communications Networks in the 700 MHz and 3440–3600 MHz Frequency Bands (the Tender). CTU set a deadline to submit comments until 16 April and subsequently extended it due to the COVID-19 measures until 4 May 2020.

Based on the overall assessment of comments received from 29 stakeholders, CTU decided to amend some of the basic principles of the tender conditions. Due to this reason, CTU decided to end the process after this public consultation and announced a new public consultation with amended tender conditions. In line with the principle of economy, CTU decided not to settle individual comments on the previous tender conditions in detail and published this communication on settlement of the comments.

Below, CTU summarizes the selected basic changes in the tender conditions. CTU published the changed conditions in a form of a new draft Invitation to Tender for public consultation on 4 June 2020.

Reserving a block in the 700 MHz band for new operators

It is clear from the received comments, that a number of important actors are interested in acquiring radio frequencies in the 700 MHz band to become a new nation-wide operator (see comments from ČEZ, Nordic Telekom, České Radiokomunikace, Sazka). It is also clear, that access to radio frequencies in the 700 MHz band suitable for nation-wide coverage is important for a new operator. Even the Ministry of Industry and Trade recommended reserving radio frequencies in the 700 MHz band for new operator.

CTU is convinced, that despite the conflict of commercial interest of individual actors, they agree that the new operator should have the option to acquire radio frequencies in the 700 MHz band allowing for nation-wide coverage. Therefore, with regard to the interest in radio frequencies in the 700 MHz band shown by several stakeholders, CTU suggest reserving one block of 2x10 MHz for new operators. However, CTU plans to set the tender rules so that if none of the new operators is not interested in the reserved radio frequencies, this option would not apply.

National roaming

CTU continues to support entrance of one or more new operators with a different level of own infrastructure on the market, therefore, it plans to preserve the national roaming obligation. However, CTU took into account comments (received mainly from the incumbent operators) aimed at provision of national roaming only to the legitimate applicant with a significant share of own infrastructure. With regard to these comments, CTU is considering changing the national roaming conditions so that the conditions of own coverage for the legitimate applicant interested in national roaming will be tighten up as follows:

• the condition of service availability defined by a minimum number of base stations will be added to the current condition of providing coverage to 10 % of the population when starting the provision of national roaming;

• the current condition of providing coverage to 20 % of the population by 30 June 2025 will be increased to 30 % of the population and supplemented by a condition of service availability defined by a minimum number of base stations.

The radio frequencies hold by a legitimate applicant, which will be used to ensure the required coverage, will be irresolute - meaning they can be in the 700 MHz band or in the 3400–3800 MHZ band.

CTU's target is, that the legitimate applicants interested in national roaming were only significant infrastructure actors, who use own radio frequencies to provide coverage with own networks to the population of the Czech Republic corresponding to the equivalent coverage of Prague and all cities in the Czech Republic with more than 50.000 inhabitants, which the Czech Republic considers a priority with regard to 5G network coverage, in line with the government's 5G Strategy.

CTU will also enable that only some of the incumbent operators provide national roaming based on the results of the tender

The purpose of national roaming is to allow new actors, who will contribute to fulfilment of the tender’s target to promote competition mainly on infrastructure level, to enter on the market.

40 MHz for Industry 4.0

CTU received many comments related to the block od 40 MHz, which was not considered to be included in the tender and allocated later for Industry 4.0. CTU decided to take into account the comments, which support use of radio frequencies for local non-public industry applications and require to make the scope of these frequencies broader (e.g., comments from Škoda, Siemens, Český telekomunikační klastr, etc.), as well as the comments, which mentioned allocation these frequencies to mobile operators (mainly from the incumbent a new operators). CTU decided to put these radio frequencies back to the tender, but it also linked two abstract blocks of 2x20 MHz in the 3400–3600 MHz with a commitment to provide wholesale offer to lease all frequencies, which the holders of these blocks are entitled to use in the 3400–3800 MHz band- This will allow for an effective area-wide use of all frequencies in this band for public electronic communications network and at the same time make these frequencies accessible for local non-public 5G network for Industry 4.0 with a block of at least 40 MHz but probably larger, especially if these two blocks are acquired by an operator (or two operators) who are at the same time allocation holders in the 3600–3800 MHz band. These blocks will be offered for a lower auction price and during re-farming will be placed in a relevant part of the 3400–3800 MHz band with a priority.

Auction rules

Based on the submitted comments, CTU also considers to amend the auction rules so that new operators will be allowed to withdraw their bind on frequencies in the 700 MHz band in case they would not acquire frequencies in the 3400–3600 MHz band due to an excess demand and high price, and vice versa. This will allow CTU to eliminate the so called exposure risk of new operators.

Ref. No. ČTÚ-12 711/2020-613/III.vyř.
Frequency Spectrum Management Department