2.8 billion euros is the sum that the four operators ended up aligning yesterday, the third and last day of auction for frequencies in the 3.5 GHz band. A 5G operation well conducted, which did not sink into the bidding process as in Italy or Germany where 6.5 billion euros had been reached. But does this really reshuffle the cards with operators? They all broke a euphoric press release last night when the results were announced. Like they won the World Cup.
Of course, you could say there is no loser. The system was designed so that everyone leaves with a substantial slice of the pie. The four large operators were effectively guaranteed to recover at least one large block of 50MHz at the fixed price of 350 million euros.
Despite everything, Orange is the winner and the one who takes the most blocks (90 MHz) by putting 845 million euros on the table. Just behind, SFR * leaves with 80 MHz. Finally, Bouygues Telecom and Free Mobile are content with 70 MHz. Does this difference of 10 to 30 MHz bring a marked advantage to the incumbent operator?
Orange does more than double its portfolio
First of all, with nearly 20 million subscribers, Orange has the largest number of mobile customers in France. This is considerable and it had to acquire enough frequencies to maintain its quality of service. It adds 90 Mhz to its 4G portfolio, which was already the largest operator. Until then, it had 83.5 MHz, or 27.9% of mobile frequencies. It more than doubles its portfolio which will consist of 223.5 MHz in total if we add the 50 MHz allocated to all. For comparison, Free Mobile had “only” 68.5 MHz and now climbs to 188.5 MHz. It’s a good progression but the gap remains notable.
The incumbent operator thus retains its dominance in terms of spectrum. This is important to remember because some 4G frequencies will be able to be gradually reallocated to 5G. It is therefore certain to offer a faster speed than its competitors for its 5G network. But will he be able to transform this strong point commercially?
The rest of the episodes seem to be written in advance. Sure of its advantage and true to its habits, Orange will not sell off 5G. And the first leaks on the price of its packages seem to confirm it. Bouygues Telecom and Free Mobile may, on the other hand, be tempted to do so. Or in any case not to proceed with tariff increases. We are now waiting to know the marketing strategy of the operators. They could imitate China, South Korea and the United States where pre-subscription systems have been offered to subscribers to immediately switch from 4G to 5G the day the networks are opened. Not sure it works so well here, especially if the French are unaware of the coverage to come. Despite everything, the equipment manufacturer Ericsson revealed this week that 20% of customers would be ready in our country to switch to 5G within 6 to 12 months.
* 01net.com is published by a subsidiary of NextRadioTV, itself owned by Altice Médias.
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