Albania is on the verge of becoming a 5G-enabled nation, with its telecom regulator, the Electronic and Postal Communications Authority (AKEP), officially launching its first 5G spectrum auction. This crucial development is expected to advance Albania’s telecommunications infrastructure significantly.
Spectrum Breakdown
The auction is set to offer five blocks of spectrum in the 3400-3800 MHz band, including two 80 MHz blocks and three 40 MHz blocks. The minimum starting bid for the 80 MHz blocks is set at EUR 3.634 million (approximately USD 4 million), while the 40 MHz blocks start at EUR 1.812 million (around USD 2 million). To ensure a competitive bidding process, AKEP has capped the number of blocks any single bidder can win at three, totaling 160 MHz of spectrum.
This auction, expected to raise a minimum of EUR 12.7 million (USD 14.05 million) for the Albanian state budget, underscores the strategic importance of 5G in the region. The minimum bid prices in Albania are notably higher than those in neighboring countries, reflecting the urgency and necessity of this technological advancement.
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For instance, in Kosovo, the rights to use a larger spectrum block (100 MHz) were granted for approximately EUR 2 million, while in North Macedonia, a similar amount of spectrum in the same band was auctioned for EUR 3 million. The higher prices in Albania could be attributed to its slightly larger population, which stands at around 2.4 million, although, the recent census indicated a significant population decline.
Bidders have until October 17, 2024, to submit their offers, and the auction will proceed across five rounds. Winning bids will be determined purely on the highest offers, with payments structured in two phases: 50% immediately after the auction and the remaining 50% six months post-authorization. The successful bidders will secure 15-year usage rights for the spectrum, with an option for extension.
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The auction comes following stringent rollout requirements. By 2027, 55% of Albania’s population will be covered by 5G services, increasing to 85% by 2030. Additionally, key infrastructure locations, such as ports, airports, industrial zones, and hospitals, must be covered by the end of 2025, with entire city coverage required by 2028.
While the auction is open to new market entrants, the substantial investment needed for network deployment in Albania’s relatively small market may deter some potential bidders. Nevertheless, the successful completion of this auction could mark a transformative moment for Albania’s telecommunications sector, heralding a new era of connectivity and technological advancement in the country.
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