Romania postpones 5G licenses auction until next year

Romania postpones 5G licenses auction until next year
By Iulian Ernst in Bucharest November 1, 2019

Romania’s telecom market regulator ANCOM will hold the auction to allocate the radio frequency bands dedicated to applications using 5G technologies in the first part of next year, after the government takes the necessary steps, including implementing its memorandum of understanding (MoU) with the US on this topic, ANCOM announced in a press release on October 31.

The delay in the 5G auction means that the government can no longer expect to receive the €500mn (0.25% of GDP) estimated from the 5G license auctions this year. This means stronger budget revenues next year, but an extra 0.25% of GDP on top of this year’s budget deficit, which already reached 2.6% of GDP at the end of September.

ANCOM explained that the auction can no longer be organised this year because the institution hasn’t yet received the set of network security measures from the European Commission, and the government has not implemented the memorandum signed by the governments of Romania and the US. Moreover, the new government — expected to be approved by the parliament on November 4 — still has to draft the budget for the year 2020 and approve the license fees and their payment schedule. Under these conditions, the ANCOM’s management considers that organising the auction with full transparency and predictability is not possible.

The European Commission has not yet designed the toolbox of mitigating measures to address the identified cybersecurity risks at national and Union level. On October 9, member states, with the support of the Commission and the European Agency for Cybersecurity, published a report on the EU coordinated risk assessment on cybersecurity in 5G networks. This major step is part of the implementation of the European Commission recommendation adopted in March 2019 to ensure a high level of cybersecurity of 5G networks across the EU. The cooperation group formed by the member states is supposed to agree on a toolbox of mitigating measures by 31 December 2019.

As regards the MoU with the US, it remains classified but as it was described by the authorities as compelling the Romanian authorities to carefully scrutinise the suppliers of 5G technology.

The ambassadors of Romania and the US signed the MoU on the development of secure 5G networks in August that includes a set of criteria for selecting the companies allowed to develop 5G projects. The use of Huawei networking equipment is banned in the US.

US President Donald Trump initiated the Huawei ban in May with an executive order directing his administration to restrict the purchase and installation of critical communications equipment from “foreign adversaries”.

Chinese telecommunication equipment producer Huawei has already expressed concerns about Romania possibly banning telecoms companies using its products from the 5G licenses auction, and sent an envoy in Bucharest to discuss such a scenario, indicated as very likely by the memorandum, Wall-Street.ro reported.

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