Switzerland’s Federal Communications Commission (ComCom) has announced plans to auction mobile broadband radio frequencies before the mid-2011. The spectrum that will be put to tender includes GSM and UMTS frequencies, for which licences expire on 31 December 2013 and 31 December 2016 respectively. In addition, ComCom will auction digital dividend spectrum in the 800 MHz range. The usage period for the new licences will be extended up to the end of 2028. Existing and new mobile radio operators have an opportunity to purchase the frequency packages required for long-term network operation.

The Federal Communications Commission (ComCom) is putting out to public tender free mobile radio frequencies and frequencies which will become available in the near future. ComCom will award the frequencies before the 2011 summer holidays within the framework of an auction. Existing and new mobile radio operators have an opportunity to purchase the frequency packages required for long-term network operation.

ComCom has commissioned OFCOM to put out to public tender mobile radio frequencies which are free now and those which will become available in the foreseeable future. The invitation to tender is taking place with particular reference to the expiry of the GSM and UMTS licences on 31 December 2013 and 31 December 2016, respectively. In addition, Switzerland will be one of the first countries in Europe to put the frequencies from the so-called "digital dividend" in the 800 MHz range out to tender. This wide range of mobile radio frequencies will be uniformly put out to tender for use up to the end of 2028.  

Allocation by auction

With a view to transparency and non-discrimination, the award is to be made within the framework of an auction. Today's network operators and any other interested companies can participate in the tender on equal terms. The auction format is designed so that both the number of licences and the available bandwidth are not predetermined by ComCom but are generally open. The participants in the market are therefore being offered the opportunity to acquire a promising frequency spectrum which corresponds to their business models.

The auction will be conducted using an electronic auction system from the English company DotEcon Ltd. This system allows secure bidding over the internet and has already been used successfully in Denmark, England, Holland, Norway, Sweden and Hong Kong.

Optimal frequency allocation

It is the intention that consumers in Switzerland will continue to benefit in the future from high-quality and low-cost mobile telephony products. This is why ComCom, through a new award of mobile radio frequencies, wishes to ensure an optimal, future-proof assignment of frequencies in the interests of competition.

The frequencies will be awarded in a technology-neutral manner so that it will also be possible to use the latest mobile radio technologies such as LTE (Long Term Evolution of UMTS). The early allocation of frequencies and a utilisation period extending up to the end of 2028 will enable licensees to plan for the long term and to make their investments on a solid foundation. Furthermore, additional frequencies will enable network operators to meet the booming demand for mobile broadband services.

Anyone wishing to use frequencies - a scarce public resource - has to pay fees to do so. In the case of an auction, the minimum prices for the frequency blocks are set so that appropriate licence revenue is assured. In the case of particularly attractive frequencies ComCom is laying down minimum prices which are well above the minimum prescribed by the Federal Council. The proceeds of the auction will go to the general Federal treasury.

Applications

Both the existing mobile radio licensees (Orange, Sunrise, Swisscom, and In&Phone) and any new operators which wish to participate in the auction have until 18 March 2011 to submit a candidature dossier to OFCOM. In it they must specify the maximum amount of spectrum they wish to purchase within the individual bands. They must also lodge a bank guarantee in the amount of the minimum bid for the frequencies they are applying for. They must also prove that they can meet the statutory licensing requirements and the specific obligations of the invitation to tender. If a candidate meets the requirements, it will be authorised by ComCom to take part in the auction.

It is planned to hold the auction in the first half of 2011 and to issue the licences afterwards. To prevent possible collusion and agreements between the bidders as far as possible, ComCom will not make known the names of the candidates. The names of the candidates, the winners, the acquired frequencies and the auction price will only be published after the conclusion of the auction.