ENACOM calls for a bidding process for the allocation of Frequency Bands 3,300 – 3,600 MHz intended for the provision of 5G (STeFI)

Through Resolution No. 1285/2023, published in the Official Gazette on August 29, 2023, the Argentine Communications Agency (ENACOM) established significant regulatory updates related to the implementation of 5G technology in Argentina.

In summary, Resolution No. 1285/2023 launches a bidding procedure for the assignment of radio electric spectrum frequency bands and approves the General and Specific Terms and Conditions governing the procedure, establishing the following, among other matters:

• Bands to be allocated and limit on spectrum accumulation by a single provider. The following radio electric frequency bands will be allocated: 3300-3600 MHz Band, segmented into three (3) lots of 100 MHz each. The maximum limit for accumulation of radio electric frequency spectrum bands is set at two hundred (200) MHz per Licensee for each Exploitation Area. The Exploitation Area subject to the contracting process is the national territory.

• Service to be provided based on the allocated frequencies. The allocation of radio frequency spectrum bands is intended for the provision of Reliable and Intelligent Telecommunication Services (STeFI).

• Deadline for submission of bids: Qualified participants are required to submit their bids by September 29, 2023, at 23:59 hours.

• Duration of radio frequency spectrum usage authorization: They will be granted for a period of twenty (20) years, extendable upon explicit request by the awardee, based on the price and conditions set forth by ENACOM.

• Currency for bidding: United States Dollars (USD).

• Bidders: TIC Service Licensees with at least fifty thousand (50,000) declared terminals served and providing services in at least ten (10) localities within the country are eligible to participate. They must possess a net worth of no less than ten billion pesos ($10,000,000,000).

• Bidders’ prequalification: Bidders must provide documentation proving the qualifications established in Article 24 of the General and Specific Terms and Conditions in order to be prequalified and participate in the next stage of the bidding process (i.e. auction), linked to the price of the lots of radio frequency bands to be awarded.

• Base price of the auction: The lots will be awarded to the prequalified bidder who makes the best economic offer through the auction mechanism. The base price for the auction is set at three hundred and fifty million United States Dollars (USD 350,000,000). To participate in the auction, each prequalified bidder must deposit five million United States Dollars (USD 5,000,000), an amount that will be deducted from the winning bid amount in the auction. Bidders who are not awarded will forfeit the aforementioned deposit.

• Bid maintenance guarantee: It is set at twenty million United States Dollars (USD 20,000,000) and will be returned or released immediately by default once the administrative act concluding the bidding process is notified to any non-awarded bidder.

• Impugnation guarantees for the prequalification verdict and auction minutes: They are set at seven million five hundred thousand United States Dollars (USD 7,500,000).

• Obligations fulfillment guarantee: Once the awardee is designated, they must provide a single guarantee called the “obligations fulfillment guarantee,” equivalent to fifteen percent (15%) of the total value of the allocation.

• Vacant lots: If there are vacant lots among those subjected to the call, ENACOM may directly assign them to the ARGENTINE COMPANY OF SATELLITE SOLUTIONS S.A. (“ARSAT”).

• Low-income sector service plan: It is stipulated that, when the technology used to provide STeFI is adopted by more than fifty percent (50%) of the end users of the service, the awarded companies must commit to offering a service plan intended for the low-income sector. Likewise, it is foreseen that the beneficiaries of this plan may amount to up to one third of the total users, equally divided among the awardees, with none of them being able to fulfill another awardee’s obligation.

To access the complete text of the Resolution, as well as the General and Specific Terms and Conditions of the Bidding Process – published as an Annex – click here.

The information above detailed is a general overview of Resolution No. 1285/2023 related to some of its most relevant disposition, and not a legal counsel and analysis on its extent and application. For further information on this matter, you may contact Juan Antonio Zocca (juan.zocca@bruchoufunes.com) and  Ignacio Minorini Lima (ignacio.minorini.lima@bruchoufunes.com).