Telecom companies criticizing Siem for changes to 5G competition

Minister of Foreign Trade and IT Raul Siem (EKRE).
Minister of Foreign Trade and IT Raul Siem (EKRE). Source: Siim Lõvi/ERR

Telecommunications companies are criticizing Minister of Foreign Trade and IT Raul Siem's decision to split the 5G frequency band into four parts in the Ministry of Economic Affairs and Communications' competition, as they believe that they can only offer 4G development, not quality 5G services, on smaller frequency bands.

In a letter to Siem, the Estonian Association of Information Technology and Telecommunications (ITL) said that if the minister intends to move forward with the competition under the new conditions, telecom companies will not be able to provide the expected 5G services — only the continued development of the current 4G network.

The ITL finds that it is not possible to offer higher data speeds or data transfer capacities than the current 4G level using the solutions offered in the minister's order.

According to the competition conditions still currently in force, the 5G frequency band allocated to Estonia would be divided into three, but both the Competition Authority and telecom company Levikom, have argued against this, the latter having taken the Ministry of Economic Affairs and Communications to court over the matter. The main argument of both the Competition Authority and Levikom was the restriction of competition.

The ITL finds that issuing three licenses would not restrict competition, and noted that dividing the frequency band into four would instead increase prices for consumers.

"The issuing of four licenses instead of three licenses under expedited and ill-thought-out conditions is not a measure that promotes competition," the association said.

Tele2 wants neutral network

In a letter to the IT minister, Tele2 has called for the thorough analysis of the construction of an operator-neutral 5G data network. The telecom company believes that a neutral network would open the technology up to all interested companies, and not just mobile network operators.

"This would be a real motor for innovation for Estonia," Tele2 Estonia CEO Chris Alan Robbins said. "Not a closed infrastructure model like we have right now, where all wireless access is controlled by three operators."

Robbins noted that if Tele2, Elisa and Telia each started to build their own networks, that would mean increased electricity consumption as well as visual pollution, as public spaces, event locations, roads, parks and roofs would be "packed" with 5G sites.

A shared network would also make it easier for the state to hedge cybersecurity-related risks that have been tied to "some producers of 5G devices," he wrote to the minister.

Robbins also recommends building a separate 5G network because building a neutral network on top of existing 4G and 3G networks would be very difficult, and separating 5G from previous-generation networks would be reasonable, looking forward.

According to the CEO, building a neutral network would put Estonia at the forefront globally; currently, only Malaysia, the Netherlands and Austria have taken initial steps in the same direction.

The construction of a neutral 5G network would also be cheaper for consumers as well, he added.

Swedish vs. Finnish example

Telia Estonia CEO Hans Robert Pajos said that the minister's change of direction is incomprehensible, considering the fact that the state has put quite a bit of effort into proving the correctness of the dividing up of the frequency band into three parts in court.

Pajos wrote to Siem that the issuing of four frequency licenses instead of three will not promote competition in Estonia or foster investments. He also noted that the smaller the bandwidths authorized for use by an operator, the more the potential is reduced to build a 5G network capable of offering high-quality services.

"In the case of a 50 megahertz-spectrum frequency distribution, it won't be technologically possible to fully realize the potential of devices to be installed in the 5G network," he said, comparing it with a highway capable of withstanding speeds of 100 kilometers per hour being built with the support of major investments where the speed limit is then restricted to just 50 kilometers per hour due to decisions made by the government.

According to the Telia CEO, Siem's planned changes wouldn't increase competition, but rather pose a serious threat to the development of Estonia's digital society as well as damage public interests.

"In the case of such a division of frequency resources, consumers' expectations for the deployment of ultra high speed 5G mobile data would be a long way off from being fulfilled," he wrote to the minister. "With such frequency allocations, it will not be possible to establish the ultra high speed 5G connections to be offered on 5G networks that have been long awaited as well as described on the state's 5G roadmap."

He also highlighted Latvia and Sweden's cases as warnings, where operators were issued licenses for 50 megahertz bands instead of 100 megahertz ones (just 20-40 megahertz in Sweden), and no significant progress has since been made on 5G networks. Operations were launched on a 5G network in Sweden only after an operator was granted an 80-megahertz band for use.

According to Pajos, Estonia should follow Finland's lead instead, where the 5G frequency band was divided into three parts, and all three companies offer services on the 5G network.

Levikom in favor of four-way split

Levikom, however, supports Siem's proposal to amend the current regulation.

"Levikom supports the issuance of four frequency permits in the frequency band 3,410-3,800 megahertz ⁠— as eight parts in total ⁠— as it will allow a local or foreign new player to enter the Estonian 5G infrastructure market, whose business model may be different from that of traditional mobile services provision," Levikom Eesti board chairman Toomas Peek said in a letter to the Ministry of Economic Affairs and Communications.

The company also supports the allocation of frequency blocks, including both the channel widths of the frequency blocks and the location of the different frequency blocks in the frequency band — i.e. the distance between the blocks — given the later need to merge the blocks during refarming after a possible coordination agreement with the Russian Federation.

"We have consulted with our technical experts and network technology providers and received confirmation that the distribution, size and location of the frequency blocks proposed by the Ministry of Economic Affairs and Communications in the frequency band are technically feasible so that refarming does not involve a significant need to rebuild the radio network or economically burdensome technical solutions," Peek said.

He added that the company does not understand the allegations that the allocation of frequency blocks proposed by the ministry does not allow for the reasonable building of a 5G network, noting that Levikom and its partner have performed a thorough technical analysis, and despite the differences in the technical solutions of various network technology providers or the current state of development of the network solution, the company does not see any substantiated basis for the aforementioned allegations.

"The 50 megahertz channel width is in line with the 5G standard, which sooner or later must be supported by network technology providers, and known 5G base station technical solutions — IBW/OBW allocations — would allow the frequency blocks proposed by the Ministry of Economic Affairs and Communications to be technically implemented without the need for costly special solutions or reconstruction," Peek said.

In addition, the company supports the ministry's proposals to establish synchronization requirements for networks both domestically and with neighboring countries, and the proposal to include a national security and safety clause in the conditions of the frequency license competition, laying down — subject to the entry into force of the relevant lower-level legislation — requirements for the coordination and authorization of the use of hardware and software used in 5G networks to be established with the relevant authorities.

According to Peek, Levikom does not support restarting the entire process for issuing permits in the 3,410-3,800 megahertz frequency band, i.e. reopening and going through a public consultation, discussing the conditions and requirements of the procurement, as the entire process was already completed in 2018-2019 and the situation has not changed compared to 2018.

"There is no need to go through the whole process again, as all interested parties have expressed their views, court disputes are over, the four frequency license option is not new — it was the first option discussed in the 2018 public consultation — and the Estonian market and economy needs new network technology-based services and applications as soon as possible," he said.


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Editor: Aili Vahtla

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