The government revenue figure for licensing those 700 MHz spectrum was expected to be 1.05 billion euros. However, that number can be slightly reduced if operators accept government conditions: deploy a lot as soon as possible.
Full deployment of 5G will be very expensive
In fact, the government wants 5G coverage to match that of 4G in 2026 today. That process will not be easy, since 5G requires fiber optic accesses almost everywhere due to the high speeds and large number of connected devices that the new standard supports. That’s a big difference from the deployment of 5G versus 4G, where 4G can use radio links to an antenna that does have a fiber connection.
For this reason, the government prefers to sacrifice some income in the short term in exchange for making Spain one of the world powers in 5G with a deployment of thousands of antennas throughout the country.
Operators are accounting for how much that investment can cost them, and the figures managed by Antonio Coimbra, CEO of Vodafone, put the cost at least € 5 billion for the entire market. If you want to provide coverage to devices such as the connected car, the figure would rise to 10,000 million.
With those 5,000 million euros of investment, coverage of 98% of the Spanish population would be reached, similar to what 4G currently has. The additional 5,000 million would not be very useful to increase the percentage of coverage of the population, but it would be so that the autonomous car has coverage on all the roads and highways of the country to be able to give full service.
4G and fiber to 100% of the population will cost less
To reduce the cost of deployment, operators will collaborate by renting the antennas to each other, and will likely even share spectrum rather than exclusively using each operator’s own. This sharing could reduce the cost by 40% compared to if the operators decided to deploy 5G separately.
To this investment must be added what the operators will continue to make to finish the deployment of 4G, and also to continue wiring the country, where they already reach 80% of the country’s population. Telefónica, for example, plans that by 2024 all copper will have been replaced by fiber, and there is still a long way to go. According to Coimbra, the additional cost of deploy fiber to the six million homes that do not yet have it, in addition to guaranteeing 1 Gbps for all of Spain, it will cost 1,500 million euros. He 4G to 100% of the population will cost about 250 million euros, and once it is complete, the 3G network would be turned off.