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Spain offers tower companies €150 million for 5G

The Spanish government plans to award €150 million in funding to passive infrastructure companies willing to support the rollout of 5G in areas with poor mobile data coverage.

The state on Monday laid out the conditions for the scheme, which forms part of its post-Covid national recovery plan, known in English as the Recovery, Transformation and Resilience Plan. It hopes to attract network players to the contest: we’re talking the likes of Cellnex and American Tower, here, while Spanish newspaper El Pais also lists Vodafone’s Vantage Towers and Orange’s Totem as likely candidates, since both have a sizeable presence in Spain.

Under the terms of the contest, any company rolling out passive infrastructure – which could be towers, masts or backhaul infrastructure – backed by the funding ill be required to grant access to at least four mobile service providers.

That’s really just the government ticking the appropriate ‘competition’ box; passive infrastructure specialists and neutral host providers rarely need much encouragement to shoot for a high tenancy ratio on their kit. That said, it should prevent any Spanish telco seeking to manipulate the situation to improve its own coverage in these underserved areas at the expense of its rivals; coverage is still king in hard-to-reach locations.

In this case, these locations are roads, railways and rural areas. They are divided up geographically into four zones, the largest – in financial terms, at least – being Zone 1, which covers Galicia, Asturias, Cantabria, the Basque Country, and Castilla y León, and offers funding of €52.9 million. The remainder of the sum is split roughly equally between the other three zones.

Interested parties will first have to pass through a pre-qualification phase, before being admitted to phase two, or the competition proper. In this second evaluation phase, bidders will be required to present a detailed report on their plans for the region in question, including a financial model through to 2032 covering the cost of deployment of the passive infrastructure and the cost of running it on a wholesale basis. They will also be assessed on areas such as population and geographic coverage, attention to detail in their technical plans, potential for job creation in Spain and EU, and access for disaster recovery and emergency services.

The publication of the terms and conditions of the project marks its official opening and companies that pass the pre-qualification phase in the next couple of weeks will have until 29 July to submit their applications. They may request aid only for projects that will be completed by the end of 2024, although there is the possibility of asking for a six-month extension.

In either case, funding winners will essentially have a couple of years to get those masts erected and and fibred up, which is a reasonably quick turnaround time, although highly achievable. Given how anxious the EU is to avoid being left behind on 5G, it was never going to let its member states hang around on projects like this.

For now, it’s a case of waiting to see which passive infrastructure firms take the bait.

 

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