French telcos take 5G spectrum price tag to at least 2.4 billion euros

PARIS (Reuters) - French telecoms operators brought the price tag for the country’s 5G spectrum to at least 2.4 billion euros on Tuesday, the first day of a long-delayed auction that the government upheld in defiance of growing opposition to the new technology.

Slideshow ( 4 images )

France lags neighbouring Germany, Italy and Spain in the race set by the European Commission to offer 5G commercial services by the end of 2020, having postponed the spectrum auction twice since the start of the year.

The sale, overseen by telecoms regulator Arcep, caps a year-long process for the four mobile carriers, Orange, Altice Europe’s SFR, Bouygues Telecom and Iliad, which are concerned a cash-hungry state may use any opportunity to fill its coffers.

The government has said the overall 5G spectrum would have to yield at least 2.17 billion euros.

That represents the floor price at which the government is ready to sell 310 Megahertz (MHz). It has already agreed to sell a block of 50 MHz to each telecoms operator for 350 million euros, or 1.4 billion euros in total.

The remaining 110 MHz are on sale in this auction, by block of 10 MHz and at a minimum of 70 million euros, or 770 million euros in total. The auction continues until the companies ask for more blocks than the 11 on sale.

As of Tuesday, the price of single block of 10 MHz had risen to 90 million euros, a statement issued by Arcep after the market close said.

This means the minimum price for the 5G spectrum has risen by 220 million to about 2.4 billion euros ($2.81 billion).

Orange is asking for 5 blocks, followed by SFR (3 blocks), Bouygues Telecom (3 blocks) and Iliad (2 blocks), Arcep said.

The new technology, which telecoms operators say will enable anything from autonomous vehicles to remote chirurgical operations, has grabbed headlines after several newly-elected mayors called for a delay in the deployment of 5G networks, citing potential health risks.

A government-sponsored report has dismissed the risks. Two weeks ago, President Emmanuel Macron compared opponents of 5G to followers of the traditionalist Amish community in the United States, triggering a political row.

($1 = 0.8540 euros)

Reporting by Mathieu Rosemain; Editing by Geert De Clercq and Barbara Lewis