5G: Operators Have 15 Years to Pay for 5G Licenses

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Telephone operators will have 15 years to pay for 5G licenses. The State and the ISPs have agreed to spread part of the total amount of the reserve price for these licenses. Or just over 1.5 billion euros. SFR, Bouygues Telecom, Orange and Free will have to pay more than 23.3 million euros per year.

While the launch of 5G in France is still planned for May-June 2020 , the standoff between telecom operators and the State finally seems to find a way out, and a winner. Remember us in late November, the government announced that the reserve price for 5G licenses was 2.17 billion euros. A blow for the ISPs, who did not expect that. This was followed by a real showdown and incessant negotiations between Arcep (the regulatory authority for electronic communications and the Post Office) and the government. The consensus was found: operators will be able to pay part of the bill, or 1.5 billion euros, over 15 years.

Simply put, 5G license prices fall into two categories:

  • 4 blocks of 50 MHz sold 350 million euros each for a total of 1.5 billion euros
  • 11 blocks of 10 MHz sold for 70 million euros each, which will be sold at auction

In concrete terms, the ISPs will have 4 years to pay for the 10 MHz blocks won at auction. Operators owe these payment facilities to Arcep, which has pleaded with the State for a long time for a lower reserve price than what had been announced. The government remaining silent on the organization’s requests, Arcep threatened the auction process to put pressure.

A strategy that has paid off since the Ministry of Economy and Finance has released ballast. “  The state is imprinted at negative interest rates. This is not the case for operators. For them, this spreading of payments is a real gain ” , explains Sébastien Soriano, president of Arcep, in the columns of the newspaper Le Figaro. Thanks to this greater flexibility, Arcep hopes that we will be able to achieve a “  distribution of the frequency spectrum as balanced as possible between the operators”. 

The fact remains that this good news for operators does not solve another problem: that of the choice of equipment supplier. Bouygues Telecom, SFR and Orange would like to work with Huawei, among others, and would like a response from the government on the issue . An answer that is still pending.