New Zealand replaces 5G spectrum auction with fixed-price allocation

News

The government decided economic pressures are too great to go ahead with the bidding for 3.5GHz band – could it be a model for Europe?

The spectrum auction was scheduled for February, but was postponed to the end of May due to the coronavirus crisis.

Allocation, allocation

Now the government has decided that to boost the economy and relieve pressure on telcos, it will allocate the spectrum in blocks of 10MHz for the low fixed price of NZ$250,000 (€138,736) per 10 MHz of bandwidth.

It hopes that 5G will drive economic recovery and encouraging investment.

Operators Spark and 2degrees will receive 60MHz of spectrum, while Dense Air will get 40MHz.

Vodafone has launched 5G on existing frequencies.

Spark’s CEO, Julie Hodson, commented, “Securing 3.5GHz spectrum was critical for the rollout of a full suite of 5G services, so we would like to acknowledge the government for facilitating the allocation, which will enable us to proceed with our planned 5G roll out at pace."

It will activate 5G sites during the coming year.

Model for Europe?

Some 5G spectrum auctions in Europe have been used to raised funds for the state – most notably in Germany and Italy, where operators collectively paid more than €6 billion in each instance – despite warnings that overcharging the operators would limit their ability to invest in infrastructure.

Now many 5G spectrum auctions in Europe – including in France, Poland and Spain – have been postponed because of the COVID-19 pandemic amid dire warnings of economic catastrophe, it will be interesting to see if any European countries follow New Zealand’s far-sighted lead.