Licences and regulations

To be able to render mobile telecom services we require access to radio spectrum. The amount of spectrum that is at our disposal influences the competitiveness and quality of the services we render and ultimately the customer experience. This is especially important in the light of huge growth in mobile data consumption.

In order to continue to assure the best customer experience we need to continuously optimise our effective use of spectrum. In 2021 we concluded the second phase of Refarming project. Scope of this phase was aimed at extending LTE2100 10 MHz carrier to 15 MHz by removing UMTS2100 5 MHz carrier. Afterwards, entire Orange 2100 MHz spectrum is dedicated to LTE service (or LTE/5G DSS) and total Orange LTE bandwidth should reach 50 MHz.

The main point of concern is however the acquisition of frequency resources necessary for 5G development. It is assumed that three bands will be used for the new generation network: 3.4–3.8 GHz, 700 MHz and 26 GHz.

Although the initiated auction procedure in the 3480–3800 MHz range was cancelled in June 2020, a new one has not been announced yet. The cancelled auction procedure, which had been launched in the beginning of 2020, provided for allocating four frequency licences of 80 MHz each, valid for 15 years. Only one entity from each group of companies was eligible to participate in the auction. Each participant (or its group) had to demonstrate a record of investments of at least PLN 1 billion in telecommunications infrastructure between 2016 and 2018, and to hold a frequency licence in the 800, 900, 1800, 2100 or 2600 MHz band (it is of paramount importance, as the 5G network will be initially deployed in a Non-Standalone (NSA) architecture). The starting price for each block was set at PLN 450 million.

Recently, the Regulator initiated the discussion concerning the method of distribution of the so-called ‘block 0’ in the 3400–3800 MHz band, particularly whether it could be effectively used by non-telecom companies for the purpose of private 5G networks. The process of the block 0 distribution is subject of public consultation.

Due to the auction annulment in 2020, the Company has decided to implement Dynamic Spectrum Sharing (DSS) in the 2100 MHz band, which allows dynamic allocation of spectrum resources to 4G or 5G as required. Over 1700 stations enabled such 5G service for OPL customers at the end of 2021.

* License for Cyfrowy Polsat Group to use this block expired at the end of 2018
** Public consultations on future usage ongoing

(in PLN millions)	Acquisition date	Years to expiration**	Net book value
(in PLN millions)	Acquisition date	Years to expiration**	At 31 December 2021	At 31 December 2020
800 MHz	2016	9.1	1,858	2,062
900 MHz	2014	7.5	180	204
1800 MHz	1997	5.6	–	–
1800 MHz*	2013	6.0	95	111
2100 MHz	2000	1.0	100	195
2600 MHz	2016	9.1	71	79
Total telecommunications licences			2,304	2,651

* Licence held under agreement with T-Mobile Polska S.A.
** Remaining useful life in years as at 31 December 2021.

700 MHz band is currently required to be available by 30 June 2022. However, the availability of this part of spectrum also depends on international arrangement with eastern neighbours of Poland, where this spectrum is used for digital and analogue TV and also for radionavigation (in Russia). Additionally model of the allocation of this spectrum still has not been decided. The new idea of 700 Mhz usage is described in a draft act amending the act on the national cybersecurity system published in October 2021. It includes provisions regarding the establishment of the Strategic Security Network Operator (OSBB) and the company Polskie 5G [Polish 5G] as well as the related 700 MHz spectrum allocation method (via a tenderprocedure). Under the proposed scheme, frequencies in this bandwidth would be allocated in part to OSSB and in part to a telecommunications operator or a consortium of operators. The frequencies would be subsequently used for a single telecommunication network, that is a nationwide wholesale 5G network operated by Polskie 5G. Perspectives for allocation of 26 GHz band were consulted by UKE with the market in 2020. Taking into account availability of devices, general level of 5G maturity and delay in C-band allocation we do not expect allocation of ths band sooner than in 2023.

Orange Polska has been actively involved in discussions about future bandwidth distribution plans, coming up with initiatives aimed to ensure quick and effective 5G spectrum allocation.

Annual Report 2021

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