Poland takes further step towards implementing 5G technology

On 18 October 2023, the President of Poland’s Office of Electronic Communications (UKE) announced the results of an auction for four reservations of the 3.6 GHz frequency band. The successful bidders included the largest national telecoms: Polkomtel (operator of the “Plus” network), P4 (“Play” network), Orange Polska (“Orange” network) and T-Mobile Polska (“T-Mobile” network). The 3.6 GHz band is crucial for the development of the fifth generation (5G) network in Poland, which is expected to revolutionise the telecommunications market and have a significant impact on the digitalisation of the country. The Internet of Things, smart cities, autonomous vehicles and telemedicine are just some of the areas where 5G will be applied.

Because of the auction criteria (e.g. the need to demonstrate incurred capital expenditure of at least PLN 1 billion net) and the position of individual players on the telecommunications market, the four largest national telecoms were the only participants of the auction.

Each operator was granted the right to use one block of 100 MHz for the next 15 years. Block A (3,400 - 3,500 MHz) was allocated to Polkomtel for the starting price of PLN 450 million; Block B (3,500 - 3,600 MHz) to P4 for PLN 487.095 million; Block C (3,600 - 3,700 MHz) to Orange, also for PLN 487.095 million; and Block D (3,700 - 3,800 MHz) to T-Mobile for PLN 496.837 million, the highest price. The proceeds of the auction will increase the state budget by nearly PLN 2 billion.

Complications and requirements

The auction had been delayed after the first attempt in 2020 was cancelled due to COVID-19, legislation adopted to counter the pandemic and other circumstances. The auction was relaunched in 2023 under slightly changed rules, including requirements imposed on the spectrum holders to ensure the even and dynamic development of 5G technology in Poland.

One of the requirements set out in the auction documentation is the obligation for each of the winning operators to put into operation, within 48 months of the delivery of the reservation decision, a minimum of 3,800 base transceiver stations (BTSs) across the country. These must include at least 400 BTSs in municipalities with a population of 10,000 to 20,000 inhabitants, 700 BTSs in municipalities with a population of 20,000 to 50,000 inhabitants and 300 BTSs in municipalities with a population of 50,000 to 80,000 inhabitants. 

The coverage and quality requirements ensure that the spectrum holders will, within 12 months of the delivery of the reservation decision, provide coverage of at least 30 Mbps to 95% of Poland’s households. Finally, the winning operators must provide coverage of 95 Mbps with a maximum latency of 10 ms to 99% of the country’s households within 60 months.

5G networks and cybersecurity

The changes introduced (compared to the procedure initiated in 2020) also concern cybersecurity issues. The “Requirements for the security and integrity of telecommunications infrastructure and services” stipulate that the spectrum holders will have five years to remove the following from their network – equipment, software or services from a supplier recognised “by the competent authority” as posing a “serious threat to national defence or state security, or to public safety and order, or to human life and health”.

Cyber security has also had a significant impact on the UKE’s delay in holding the auction because the regulator initially intended to wait until the introduction of amendments to the Act on the National Cybersecurity System (Cybersecurity Act). These amendments were to establish a procedure for recognising suppliers of certain products and services as high risk. The draft amendments to the Cybersecurity Act, however, were finally dropped from the parliamentary agenda.

Therefore, the reasonably detailed cybersecurity requirements set out in the auction documentation, which refer to the notion of a “supplier posing a serious threat”, have no grounds in the present law. This raises some legal doubts, which could lead to the auction being declared invalid in the worst-case scenario.

What’s next?

Under the provisions of the Telecommunications Law and the 2019 Regulation of the Minister of Digitalisation on the tendering, auction and competitive bidding procedures for the reservation of frequencies or orbital resources, the next step will be initiation of the frequency reservation procedure by the President of the UKE. The four winning operators will be the parties to that procedure. The reservation decisions, in the form published together with the auction documentation, are expected within the coming weeks.

The winning operators will then have 14 days to pay the amount declared during the auction and can then begin project preparation and implementation work. However, given that Poland currently lags behind other countries in 5G network development, this process should not be delayed any longer.

For more information on the telecom industry and 5G network in Poland, contact your CMS client partner or these CMS experts.