Research on plot size auction 3.5 GHz frequency licenses

In order to meet the ever-growing demand for data capacity in mobile networks and to roll out 5G networks and associated applications, frequency spectrum is required. In 2024, 300 MHz of frequency spectrum in the 3.5 GHz band will be auctioned for use in mobile networks (starting from 1 August 2024). In preparation for this auction, the Ministry of Economic Affairs and Climate Policy (EZK) asked Dialogic in 2020 to investigate the logical parcel sizes for auctioning this frequency spectrum. The main conclusions were: - The smallest logical size for a parcel ('lot') is 10 MHz. This is partly due to technical prerequisites (a smaller lot leads to inefficient use of the frequency spectrum). - A 10 MHz lot can result in different distributions of the 3.5 GHz band. We distinguish between equal and unequal distributions (winners of the auction receive blocks of equal size or blocks of unequal sizes). - With an equal distribution, a distribution of 3 x 100 MHz or 30 x 10 MHz is most plausible. With 3x100 MHz, there is no room for obtaining the maximum (120 MHz) and no room for differentiation between operators. With 30 x 10 MHz, fragmentation is a risk, unless a minimum amount of acquired spectrum per provider is additionally stipulated. - An unequal distribution leads to an implicitly stipulated minimum amount of spectrum. At 50 to 60 MHz, there is a tipping point - above this amount of acquired spectrum, the added value of every additional 10 MHz of spectrum decreases more rapidly. In the case of an unequal distribution, 3x 80 MHz + 3x 20 MHz, 3x 70 MHz + 3x 30 MHz, or 3x 60 MHz + 3x 20 MHz are most feasible. A distribution of 3x 60 MHz + 12 * 10 MHz offers the most flexibility, with a slightly higher risk of fragmentation. Based on the outcomes, and in line with our advice, a decision was ultimately made in 2024 to opt for a distribution in three lots of 60 MHz and 12 lots of 10 MHz.