NCC Sets NT$30 Billion 5G Spectrum Auction Floor Price

The nation is to hold its first auction for the spectrum reserved for 5G services on Tuesday next week, the National Communications Commission (NCC) said yesterday, adding that a new mechanism would be used to accelerate the bidding process.

The nation’s five major telecoms — Chunghwa Telecom, Taiwan Mobile, Far Eastern Telecommunications, Asia-Pacific Telecom and Taiwan Star — have all qualified to participate in the auction, the commission said.

The commission has set the floor price at NT$30 billion (US$983.35 million), while the Executive Yuan has set a goal to receive NT$40 billion from the auction.

Lawmakers have forecast that the auction could generate at least NT$44 billion for the government.

The telecoms have expressed concern that that the longer the auction lasts, the higher the bids they would have to place, which would in turn would increase the costs of 5G services while they are still trying to offset the costs of 4G services.

Commission acting spokesman Hsiao Chi-hung said that there is no way of forecasting how long the auction would last and whether the NT$44 billion goal could be reached.

Industry experts have estimated that the auction would last two weeks and generate about NT$40 billion.

Telecoms are to place a total of 10 bids every day in 20-minute intervals and they would indicate the spectrum width they require in each round, the commission said, adding that the firms would enter the next round of bidding when the amount of spectrum requested exceeds or equals the total amount of spectrum available.

The minimum bid increase would be set at 1.03 times the previous bid, it said.

The process is to continue until no bidders indicate their needs for additional spectrum in two consecutive rounds, it added.

The commission said that it has also created a mechanism to expedite the auction — the 51st and 101st bids are not allowed to request more spectrum than in the 50th and 100th bids respectively.

For example, if a firm’s 50th bid was for three frequency blocks in the 3.5 Gigahertz (GHz) band, the next bid could request no more than those three blocks.

This mechanism would motivate telecoms to focus on the spectrum they need and bid quickly, the commission said.

Meanwhile, the Executive Yuan yesterday said that it plans to reserve the frequency band between 4.8GHz and 4.9GHz for private corporations to conduct experiments of 5G applications, adding that fees would be charged for using the spectrum.

The plan is to be discussed at the weekly Cabinet meeting today, Minister Without Portfolio Wu Tsung-tsong said, adding that private business owners could start filing applications once the plan has been approved.

Generally, it would take them one to two years to test the technology and decide whether it could translate into a viable business model, Wu said.

The government would release about 200MHz near the 3.5GHz frequency band for companies that have succeeded in developing a viable 5G commercial model, Wu added.―Taipei Times