The auctions are likely to take several weeks and may see a new competitor enter the market.

IT and foreign trade minister Andres Sutt (Reform) said that 5G is projected to fully-hit the Estonian domestic market this summer, giving nationwide coverage.

Sutt said: "I believe that at the beginning of the summer, or during the summer months, more widespread use of 5G will be viable and not only in Tallinn, but we are actually talking all over the country; something which is also stated in the conditions of the tender."

The starting price for each permit is €1,597,00, though initial bids are not expected to go anywhere. Toomas Polli, head of tech at Elisa, one of the existing big three mobile operators, had told ERR earlier on Tuesday: "Time will tell from there,."

Erko Kulu, head of frequency management service at the Consumer Protection and Technical Regulatory Authority (TTJA) said: "In general, entrepreneurs still try to move forward in small increments, so as not to make major bids all at once. Everyone is surreptitiously watching how far their competitors are willing to go."

The auction process may take several weeks, ERR reports.

Should Lithuanian firm Bite win one of the licenses, this would fundamentally change the Estonian telcoms market, however – a new, major player would enter the market, also at the expense of an existing one.

What would ensue would be hard to envisage, Polli added: "Such a situation has not yet occurred in Estonia before."

From the state's perspective, perhaps even more key than the amount of money received is what would happen to the frequency band. 

Tender conditions state that the telecommunications company must have at least 200 base stations operational within two years of receiving the permit, 100 of which must be located in Harju County, the most populous of Estonia's 15 counties, while all other counties, even the most sparsely populated ones, must be home to a minimum of five base stations.

Erko Kulu at the TTJA said: "Once the auction of the first frequency license has been concluded, we will immediately issue a state fee notice to the company, after which it will pay the fee, and receive the license immediately afterwards. Then we will press on with the next frequency license auction."

Other considerations include those in the eastern part of Estonia, where operators need to request permission from authorities in the Russian Federation, given the latter use the same area in their satellite communications, ERR reports.

On Tuesday, the frequency bands 3410-3480 MHz and 3600-3660 MHz were put up for auction; the highest and lowest frequencies in each band are denoted on each permit. 

Lower frequency bands are simpler to utilize; from 3,600 MHz upwards, restrictions on operation are more stringent, ERR reports, though this is contingent on the relaxation of Russian restrictions which, if it were to happen, would lead to three larger bands – 3,410-3,540 MHz, 3,450-3,670 MHz and 3,670-3,800 MHz.

It is not known if this will go ahead; as things stand bidders need to account for having smaller 60-70 MHz ranges.

Nor will the upcoming auctions be the last of their kind. The TTJA says it hopes to be able to announce an auction for the 694-790 MHz bandwidth, later this year, a frequency band which has already been made available in Latvia.

The announcement brings disputes which have gone on for over three years in Estonia, across no fewer than seven IT ministers, including the current incumbent.

The latter said that the disagreements had held Estonia back, while legislation was required to get things moving.

Sutt said: "Whereas we were among the earliest adopters in the world when it came to 4G, we are at the tail end with 5G at the moment," adding that the Electronic Communications Act which passed last year grants the legal framework to move forward.

Chris Robbins, head of another of the big three players, Tele2 Eesti, said these delays had not negatively impacted his company.

"We've already launched sites back in January, and we are already building in Tallinn our 5G network. So it wasn't really dependent on this auction, so it didn't really slow things down from that perspective at all," Robbins told AK.

In the first instance, Robbins noted, 5G pertains to faster internet rather than a radical transformation in the day-to-day use of smartphone tech.

He said: "There aren't a lot of use case already for residential customers for things they can do with the phones yet; there's not even the devices available yet. The first thing is the faster speeds; some of those things, we're expecting in the next couple of years. Some of the use cases – some of the things customers can use 5G for will be coming out, but right now really it's just about faster speeds."

In other parts of the country, 5G networks were open with Telia last November.

Andre Visse, the company's chief technology officer, said however that prolonging the frequency licenses process has hampered the provision of quality service in high-traffic areas.

Visse said: The problem has been, first and foremost, the locations where we already run on tight resources today, where we have too many customers in one particular location, and where we don't have enough frequency resources to provide quality services. This is why we're expecting more frequency."

The winner of the first of the three license tenders is barred from the second and third auctions, however, to avoid too large of a market share going to any one operator.

The auction participants will be up-to-date on competitors' bids after each round; only the final winning bids will be made public, and it is still hard to forecast what the final prices may be – for instance, in 2018 in Italy, bids came to €6.5 billion, though in Finland, the value ended up being €77 million.

Three rounds of bidding will be held each working day, with the first of these needed by 9 a.m., Erko Kulu said, with 12 noon and 3 p.m. the deadlines for rounds two and three.

Kulu said that the process is likely to take several weeks per frequency license.

5G generally started to be rolled out worldwide in the past four years, replacing the 4G networks in use over the past decade or so. 3G came in over 20 years ago; 2G, in the 1990s.

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