France invites mobile operators to 4G spectrum auction

The French government wants at least €2.5 billion for spectrum in the 800MHz and 2.6GHz band

Mobile operators that want to bid on spectrum in the 2.6GHz and 800MHz bands in order to operate 4G (fourth generation) mobile services can now send in their applications, French regulator Arcep said on Wednesday.

To ensure that France gets a good value for its assets, the chunks of spectrum operators can buy come with a reserve price which totals €2.5 billion (US$3.6 billion), according to a spokesman at Arcep.

The spectrum is neutral, meaning that operators can use any technology they want, as long as they follow the rules set by the regulator, but LTE (Long Term Evolution) is expected to be the technology of choice.

The roll-out of LTE in some of the larger European countries will help drive down the cost of LTE devices thanks to better economies of scale for manufacturers, according to Sylvain Fabre, research director at Gartner.

The 800MHz spectrum has so far been seen as more valuable by operators. German operators paid more for the lower band when the country had its auction over a year ago.

One of the goals is to provide the entire French population with high-speed mobile Internet access. Each operator awarded spectrum in the 800MHz band will have to cover 99.6 percent of the population of mainland France in 15 years, according to Arcep.

Low-frequency radio signals tend to carry further than high-frequency signals. Networks using the 800MHz band will require fewer base stations to provide wide mobile coverage than 2.6GHz networks, meaning they can provide mobile broadband service in sparsely populated rural areas at lower cost, according to industry organization the GSM Association.

The French government and Arcep has tried to find a balance between rural coverage, competition and money when setting up the ground rules for the auction.

In each frequency band, the spectrum will be awarded in paired channels of the same size, one for downloads and one for uploads. Operators won't be able to buy more than 15MHz of spectrum for each direction in the 800MHz band, or 30MHz in the 2.6GHz band.

Also, should there be four eligible candidates for the 2.6GHz-band, each carrier is guaranteed to receive two 15MHz channels if it has applied for this quantity of spectrum, according to Arcep. That would result in more competition, but also slower download speeds, because the current generation of LTE needs two 20MHz channels to perform at its best.

However, the option to buytwo times 15MHz in the 800MHz band could result in higher speeds than operators will able to offer in other European countries.

The deadlines for applications are Sept. 15 for the 2.6GHz band, and Dec. 15 for the 800MHz band. Following an auction, Arcep will be allocating 2.6GHz band spectrum in late 2011 and 800MHz spectrum in early 2012, it said.

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