Mobile operators ink 700 MHz sharing deal

Spain’s three largest mobile operators have brokered a deal to share spectrum in the 700 MHz band to boost rural coverage and help them secure government funding.

Telefonica’s Movistar, newly-created MasOrange, and Vodafone’s Spanish business have agreed to share frequencies to enable them to get more capacity and better 5G network coverage to difficult-to-reach areas, Expansion reports, citing unnamed sources close to the situation.

The telcos themselves declined to comment, the paper said.

The cooperation deal is linked to the government’s UNICO programme, which comes under the umbrella of its broader post-Covid recovery efforts, backed by EU financing. Under UNICO – that’s Universalización de Infraestructuras Digitales para la Cohesión, or Universalization of Digital Infrastructures for Cohesion, in English – Spain’s Ministry of Economic Affairs and Digital Transformation (MINECO) is handing out funding to extend network reach to uneconomic areas. Specifically, its goal is to bring about universal access to ultra-fast broadband and widen 5G coverage.

UNICO has already doled out hundreds of millions in funding; we looked at the 5G backhaul portion of the programme just under a year ago, which saw €448 million allocated to a group of small – relatively speaking – operators.

Now the country is working towards the UNICO 5G Redes Activas part of the scheme. This will award €544 million in grants to fund the deployment of 5G equipment in towns with fewer than 10,000 inhabitants. Specifically, the programme focuses on rural areas where there is no 4G coverage currently and where 4G is not planned for the next three years. The subsidies can be used for both active and passive equipment, including backhaul, masts or energy supply, needed for the rollout of standalone 5G.

The funding will be awarded on a zonal basis – there are 50 in all – and this time the contest is geared specifically towards 5G network operators. Essentially, that means Spain’s big three, since market newcomer Digi Communications is still heavily reliant on wholesale deals with its rivals.

The Expansion report explains that as a result of this cooperation deal between the three, whichever company carries out a network deployment in one zone or province will be able to use the 700 MHz spectrum of all three in that area. Each of the three has 2×10 MHz in the 700 MHz band, or 10 MHz upstream and 10 MHz downstream, which, as the paper notes, would enable them to offer around 40 Mbps to end users using only their own spectrum. But when all frequencies are factored in, the winning telco would be looking at 100 Mbps, and that’s what the government is shooting for.

Basically, the deal enables the operators to meet the requirements of the UNICO 5G Redes Activas contest by solely using 700 MHz spectrum and equipment, which will be less costly and should require less maintenance.

The government opened applications for the contest last year, but as yet has not announced who the winners are. Presumably that announcement is imminent.

It’s a pretty sensible move by the MNOs to get their ducks in a row with a spectrum-sharing deal ahead of that announcement, presuming Expansion’s information is correct, that is. Doubtless we will hear more on both fronts before too much longer.