Five companies bid in 5G tender: Wom was the highest bidder and Finnish firm surprised

The implementation of 5G technology reached a new stage. Five companies presented offers this Thursday in the framework of the tender to be awarded radio spectrum – which is where data and voice are transmitted – for the development of 5G networks, a process that began on November 12.

They are Entel, Claro, Movistar, Wom and Borealnet, the novelty of the process, a consortium made up of Business Finland and Rivada Networks, who sent their proposals to be part of the deployment process.

In addition, this process was the highest number of bidders that have participated in a public spectrum tender in the country, after in 2009 two bidders arrived for the AWS band -Nextel and VTR- and in the process of In 2013, for the bidding of the 700 MHz and 2,600 MHz bands – which were fundamental for the development of commercial networks in 4G technology – three participated: Entel, Movistar and Claro.

On this occasion, Subtel held four separate tenders – one for each band considered to be awarded – for a total of 1,800 MHz of radio spectrum. All the auctions received proposals and the most disputed was the 3.5 GHz band, which received five offers. In this band, Subtel had only 150 MHz and it is calculated that a minimum floor of 70 MHz is needed to provide a good 5G service.

In this sense, the Minister of Transport and Telecommunications, Gloria Hutt, highlighted the interest of the industry in the contest. “We think it is a very good result. We have to consider the size of the market and the amount of offers is good in the sense that we have competition in all bands, “he said.

The Undersecretary of Telecommunications, Pamela Gidi, for her part, added that “we make a very good balance, which shows the trust that there is and the commitment that all these companies place in the Chilean telecommunications market.”

The highest bidder was Wom. The firm, which belongs to the Novator fund, submitted bids at all auctions. The surprising Borealnet bid in three contests, corresponding to the 700 MHz, AWS and 3.5 GHz bands.

In the case of incumbents, Claro also presented bids in three tenders (AWS, 3.5 GHz and the 26 GHz millimeter), while Entel did so in two auctions: 3.5 GHz and the 26 GHz millimeter. Movistar , which despite maintaining a current consultation in the Free Competition Defense Tribunal (TDLC) questioning the bases of the four Subtel tenders, participated in any case in the auction of the 3.5 GHz band.

Christopher Laska, CEO of Wom, commented that “we are very proud of the team’s work, with the four projects that we have submitted to the public spectrum tender, and that it will be fundamental for the economic and technological development of Chile.”

For his part, Manuel Araya, manager of Regulation and Corporate Affairs at Entel, pointed out that “our presentation in the bands we participate in seeks to reflect the best strategy to ensure that 5G is achieved for Chile and our clients as soon as possible.”

In turn, Cristián Salgado, Director of Legal and Regulatory at Claro Chile, stated that “we hope that the spectrum bidding process will develop properly, smoothly and without major setbacks, in order to move decisively forward in the deployment of the new networks ”.

After this milestone, the next step will be the resolution of the contest, which will be announced in February 2021. It is estimated that the decision by the Comptroller will take account of the decree in June of next year. However, it is expected that the start of the 5G service in the first stage will be at the beginning of 2022. “That is the plan we have and until now we have been complying with it, we have always had difficulty, there has been judicialization, there have been resources, but we are going the deadline we had planned, ”Minister Hutt said.

However, the tender could suffer setbacks if Movistar – which tried to suspend the process through a precautionary measure in which it requested the suspension, without success – finally resorts to the Supreme Court and the court agrees with them.

“We are confident that all aspects of competition have already been validated. They are not issues outside the courts, so that is why we believe that this process should continue, but naturally if there is new information or a variable that the courts have to consider changes, we will also see what arguments we provide to defend the continuity of the process “, Hutt indicated. At the moment, Gidi pointed out, “our roadmap is to launch and deploy 5G in Chile and from there we are not distracted by industry actions, we continue to work in favor of the users.”

Borealnet was the big surprise during the opening of offers in the framework of the bidding process to be awarded spectrum for the development of 5G networks. Although the firm had expressed its intention to participate in the tender, this consortium made up of Business Finland and Rivada Networks, presented proposals in three of the four tenders developed by the Ministry of Transport and Telecommunications (MTT), through the Undersecretariat of Telecommunications (Subtel).

Business Finland is a public organization that offers services for internationalization and financing of innovation, as well as promoting tourism and investment in Finland and is managed by the Ministry of Employment and the Economy of that country. It is an institution similar to Corfo in Chile.

Rivada Networks is a United States-based company that provides communication services. The firm defines itself as a designer, integrator and operator of wireless and interoperable communications networks. On its website, the firm points out that “considering the demand for mobile data, which is growing at an approximate annual rate of 50%, we are faced with the urgent need to use spectrum and wireless networks efficiently. Rivada’s technology responds to this need ”.

Borealnet’s bet is to enter the market as a wholesale operator. In other words, if part of the spectrum were to be awarded, one of the options you then have is to “lease”, for example, to other network operators that require services.

Wom reported that it closed the third quarter of this year with 6.5 million clients, reaching a 21.9% share of the mobile market, versus 19.4% in the same period of the previous year.

The company reported total revenue of $ 157 billion during the third quarter, representing a 20% increase over the same period last year. On the other hand, it reported that the adjusted Ebitda was equivalent to $ 45 billion, which represents a growth of 19% compared to the same period of 2019.

Thus, the company reported total accumulated income as of September for $ 428 billion, which represents an increase of 14% in relation to the same period of 2019. “These results are a reflection of a constant effort and sustained work during these years,” he said. Christopher Laska, CEO of Wom.