Bouygues pays top amount for French 2.6Ghz LTE spectrum

23 September 2011

The first part of the auction in France of spectrum designated for LTE servces has seen all four bidders win spectrum and the French government exceed its reserve price by 33%.

The auction for spectrum in the 2.6GHz band saw:

• Bouygues Telecom allocated a duplex frequency block of 15 MHz, for which the company bid the sum of €228,011,012 and made a commitment to host MVNOs on its network.
• New entrant Free Mobile allocated a duplex frequency block of 20 MHz, for which the company bid the sum of €271,000,000 and made a commitment to host MVNOs on its network.
• Orange France allocated a duplex frequency block of 20 MHz, for which the company bid the sum of €287,118,501 and made a commitment to host MVNOs on its network
• SFR allocated a duplex frequency block of 15 MHz, for which the company bid the sum of €150,000,000, and did not make a commitment to host MVNOs on its network.

The auction therefore raised a total of €936 million – compared to the reserve price of €700 million.

On a straight price per MHz calculation, then Bouygues has paid the most, by bidding €228 million Euro for its 15MHz duplex block. However, it is worth nothing that the operators will have made a calculation of the value of spectrum in alliance with what the intend to bid for in the 800MHz. Broadly speaking, the 800MHz band will provide wider coverage and will come with service obligations. The 2.6Ghz band will be better suited to smaller-sized cells in urban or suburban territories, although its in-building penetration performance will be worse. By bidding the highest, Bouygues will also gain first consideration from the regulator in the position of its frequency within the 2.6GHz band.

In the coming weeks, ARCEP will issue the winning candidates with licences to use their respective frequencies, once it has determined each operator’s position on the 2.6 GHz band. For this determination, ARCEP will examine the wishes that each candidate has expressed in regard to position, in the following order – which corresponds to the average mark per 5 MHz duplex: Bouygues Telecom, Orange France, Free Mobile and, lastly, SFR.

The allocation procedure for the 2.6 GHz band marks the first stage in the award of 4G licences. The second stage will consist of the allocation procedure for the 800 MHz band, resulting from the digital dividend, for which the deadline for applications is 15th December 2011.