The allocation of 700 MHz frequency

The increasing data flow required for the "mobile internet" induces a growing need of radio frequencies for mobile operators. Therefore, operators are looking for frequency bands in order to develop their 3G or 4G activities and to declutter their networks.

The French government decided to free the 700 MHz band, reserved for digital terrestrial television services (DTT) in order to allocate it to mobile operators.

The terms of this attribution were established by the French telecom regulator (ARCEP) by a decision dated July 2, 2015 (Order n°2015-0825 on the methods and terms for allocating 700 MHz band frequency licenses in Metropolitan France to establish and operate a mobile terrestrial system).

The allocation process put in place by the ARCEP

First of all, the ARCEP imposed a restrictive condition to the allocation of 700 MHz frequencies band to maintain an effective competition among operators and provide excessive imbalances on telephony mobile market. Indeed, after this process, mobile operators will not hold more than 2 x 15 MHz in the 700 MHz band. As well, they won’t have more than 2 x 30 MHz in the lower frequency bands, including also the 700 MHz band, the 800 MHz band and the 900 MHz band.

Moreover, the 700 MHz band allocation process will consist in the ascending of six 5MHz block. At the beginning of each round, the ARCEP will gradually increase the allocation price. The reserve price for the first round was set at € 416 million for each 5MHz block. The application period began on July 9, 2015 and will end on September 29, 2015 at 12 AM.

Allocation issues and potential effects on mobile telephony market

The allocation process challenges are considerable: low frequencies represent a huge asset due to its propagation qualities. As such, the 700 MHz band is particularly coveted by mobile operators.

In this respect, the French mobile operator Free Mobile has a lag on the others competitors. However, this should be compensated in the attribution context since operators that hold frequencies in other low bands have limited possibilities of 700 MHz band attribution. Therefore, this allocation will have a significant impact on the market of mobile telephony.

Finally, this attribution will have positive effects on consumers since it implies coverage obligations for operators.

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