Frequencies - French Overseas Territories

1. Assignment of 700 MHz band frequencies in Reunion and Mayotte and 3.4 – 3.8 GHz band frequencies in Réunion

1.1 Assignment objectives

The Government informed the regulator of the goals that must underpin the specifications for the assignment of 700 MHz and 3.4 – 3.8 GHz band spectrum in Réunion and 700 MHz band spectrum in Mayotte:

• Regional development: coverage of the priority areas identified by the territories themselves (local authorities and prefectures) in 2019;
• Competition: safeguarding and stimulating competition in these markets by providing all of the players with an opportunity to improve their spectrum holdings, to then improve mobile networks’ quality of service, notably by giving access to lower frequency bands to those operators that are currently without it.

The published calls for applications satisfy the objectives set by the Government, through the procedure and the planned licensing obligations.

1.2 Assignment procedures

1.2.1 In the 700 MHz band in Réunion and in Mayotte

The planned procedures for the assignment of 2 x 30 MHz of spectrum in the 700 MHz band, to cover Réunion on the one hand and Mayotte on the other. This procedure will determine the winning candidates, the amount of spectrum each one is awarded, and their specific frequency position. Every winning candidate will be subject to a set of obligations.

The specifications plan for a mixed allocation mechanism that is not based solely on financial bids, as was the case with the award procedure for 3.4 – 3.8 GHz band frequencies in Metropolitan France in 2020. The procedure will include a preliminary stage whereby up to four operators will be able to obtain additional blocks of spectrum in exchange for additional commitments, before the auctions carried out in the second part allow them to obtain additional frequencies.

a) First part: optional commitments in exchange for blocks of spectrum

Arcep is giving applicants the option of making a series of commitments when submitting their tender package.

Designed to improve connectivity for users and give local authorities more clarity on network rollouts, these commitments include:

• Supplying a dedicated fixed access product on their mobile network;
• Activating Voice and SMS over Wi-Fi services, to improve indoor coverage;
• Increased transparency from operators on rollout forecasts;
• Increased transparency from operators on service outages.

If these commitments are made, they will be written into the obligations attached the frequency licences that are awarded to the winning candidates, and come to supplement the obligations that will apply to all of the successful applicants (described in 1.2.1e)).

If four or fewer candidates agree to make these commitments when submitting their tender package, each will be able to obtain 2 x 5 MHz of paired frequencies in the 700 MHz band, whose reserve price has been set by the Government at 0 euros.If their number is equal to or over five, the applicants will bid on the four blocks in a separate auction.

b) Second part: Auction enabling each operator to acquire additional frequencies

The principal auction will then be held to assign the frequencies that are still available after the first round of commitment-based spectrum awards. The qualified applicants, regardless of whether or not they obtain a block in the previous phase, will thus have the possibility of acquiring additional frequencies, by blocks of 2 x 5 MHz of paired frequencies, whose reserve price has been set by the Government at 0 euros.

This will be a single-round second-price combinatorial auction. The candidates indicate the amount they commit to pay for each number of possible blocks, within the authorised amount of spectrum described in part 1.2.1d).

Arcep will then determines the value of each of the valid award combinations. For instance, if two blocks are available for assignment and there are two candidates, A and B, that both want up to two blocks, the valid combinations are as follows:

• One block for A and one block for B;
• Two blocks for A and no block for B;
• No block for A and two blocks for B.

The value of a combination is the sum of the amounts bid by the candidates for the number of blocks they obtain under this combination.

The combination with the highest value is the winning combination.

Lastly, Arcep will determine the amount due from each candidate. This is the minimum amount that the candidate must have bid for the chosen winning combination.

c) Third part: positioning auction

Once the amount of spectrum assigned to each winner is known, there are multiple potential frequency position combinations. A new (single-round, second highest bid) auction will be held to determine each of the winning candidates’ positions. They will thus have an opportunity to express their frequency position preferences.

d) Capping the amount of frequencies available to each candidate

The specifications set a cap on the total amount of spectrum any one applicant can obtain in the 700 MHz band (during both phases of the procedure), which is compatible with Government’s objective of fostering a competitive marketplace:

• a maximum of 2 x 15 MHz of paired frequencies in the 700 MHz band;
• a planned maximum of a 2 x 30 MHz from the combined amount of spectrum available in the 700 MHz, 800 MHz and 900 MHz bands.

e) Planned obligations for the winning applicants for 700 MHz band spectrum

The specifications stipulate that every candidate that is assigned frequencies in the 700 MHz band, regardless of whether or not they have chosen to make optional commitments, will be subject to three, mainly coverage-centric obligations:

• An obligation to cover certain pre-identified areas, based on the needs expressed by local authorities. Operators will be fully responsible for providing coverage in these areas. As an adjunct, bringing coverage to certain areas that carry special constraints will depend on the availability of infrastructures and the granting of administrative authorisations;
• An obligation to deploy a certain number of cell sites using 700 MHz band frequencies within five years;
• An obligation for the mobile network to be IPv6-compatible, to accelerate the transition to this protocol.

1.2.2 In the 3.4 – 3.8 GHz band in Réunion

The assignment procedure is planned for 380 MHz of frequencies in the 3.4 – 3.8 GHz band, for the whole of Réunion. This procedure will determine the winning candidates, the amount of spectrum each one is awarded, and their specific position on the band.

The specifications stipulate an assignment procedure based on a financial auction.

a) First stage: auction to determine the quantities of spectrum obtained by each operator

An auction will then be held to assign frequencies in the 3.4 – 3.8 GHz band in 38 blocks of 10 MHz.

This auction will take place after the principal auction for the assignment of 700 MHz band spectrum described in part 1.2.1b).

This will be a single-round second-price combinatorial auction, as in the second stage of the assignment procedure for 700 MHz band spectrum (see 1.2.1b). The candidates indicate the amount they commit to pay for each number of possible blocks, within the authorised quantities of spectrum described in part 1.2.1d). The reserve price set by the Government for a block of 10 MHz in the 3.4 – 3.8 GHz band is 0 euros.

b) Second stage: Positioning auction

Once the amount of spectrum assigned to each winning candidate is known, there are multiple potential frequency position combinations. A new (single-round, second highest bid) auction will be held to determine each of the winning candidates’ positions. They will thus have an opportunity to express their frequency position preferences.

c) Capping the amount of frequencies available to each candidate

The specifications set a cap on the total amount of spectrum any one applicant can obtain in the 3.4 – 3.8 GHz band, which is compatible with Government’s objective of stimulating competition:

• a planned minimum of 40 MHz in the 3.4 – 3.8 GHz band;
• a planned maximum of 100 MHz in the 3.4 – 3.8 GHz band.

1.2.3 Planned obligations for the successful 3.4 – 3.8 GHz band candidates

The specifications stipulate that every candidate that is assigned frequencies in the 3.4 – 3.8 GHz band will be subject to two obligations:

• An obligation to deploy a certain number of cell sites using 3.4 – 3.8 GHz band frequencies within five years;
• An obligation for the mobile network to be IPv6-compatible, to accelerate the transition to this protocol.

1.3 Licence duration and rendez-vous clause

The frequencies will be assigned for a period of 15 years. This period can be extended by five years, provided the licence-holder agrees to the conditions attached to that extension.

In addition, an interim review is set to occur before 2030 to verify operators’ implementation of their obligations, and take stock of market requirements, notably in the areas of mobile network coverage and quality of service. Obligations could be revised based on the findings of these reviews, after having reached an agreement with the licence-holder.

2. Assignment of 900 MHz band frequencies in Mayotte

2 x 2.6 MHz in the 900 MHz band are available for assignment in 2021.

Designed to ensure fair and effective competition and efficient use and management of the frequencies, the procedure is made up of three stages:

• First, the frequencies are assigned to candidates that have less than 2 x 5 MHz in the 900 MHz band, up to that cap and subject to the frequencies’ availability. If there are several candidates, they will be ranked by their population coverage commitments.
• Second, the frequencies will be awarded to candidates that have less than 2 x 10 MHz in the 900 MHz band, up to that cap and subject to the frequencies’ availability. If there are several candidates, they will be ranked by their irrevocable financial commitment, in euros per MHz, in exchange for obtaining frequencies in the 900 MHz band.
• Third, regarding frequency positions, Arcep is proposing one or several arrangements (including those involving other, non-candidate operators). The operators will offer feedback on the proposed arrangements, then Arcep will determine the final positioning in light of those comments.

The specifications set a cap on the total amount of spectrum any one applicant can obtain in the 900 MHz band:

• planned minimum of 2 x 3 MHz;
• planned maximum of a 2 x 10 MHz.

Licences will be awarded up to 30 April 2025, so that expiration dates to align with those of existing licences to use the 900 MHz band.

3. Other overseas territories

Regarding the assignment of 700 MHz and 3.4 – 3.8 GHz band spectrum in France’s other overseas territories, public consultations will be held in the coming months with a view to finalising the procedures for awarding these frequency bands in Guadeloupe, Guiana, Martinique, Saint‑Barthélemy and in Saint‑Martin.