5G regulation and law in the Netherlands

The Netherlands lags behind other countries in making spectrum available for 5G. At the moment, 5G is still mainly used by consumers. More than two years ago, the three largest Dutch MNOs (KPN, Vodafone and T-Mobile) announced the launch of 5G. For their 5G services, lower frequency bands (700 MHz or 1800 MHz with Dynamic Spectrum Sharing or DSS) with small bandwidths are used so end-users still do not notice a significant improvement in network speed. On higher frequency bands such as the 3.5 GHz and 26 GHz bands, much higher network speeds will be able to be offered but these bands are not yet commercially available in the Netherlands. The main reason for this is the unavailability of the 3.5 GHz band. The frequencies in question are expected to become available for the 5G networks in the end of 2023 or early 2024. That has to do with a (NATO) satellite 'listening station' and with Inmarsat who are located in the north of the Netherlands. The satellite station uses the same frequency bands (between 3.4 and 3.8 GHz), making them unavailable for the 5G networks. Furthermore, Inmarsat currently uses the 3.5GHz satellite traffic band to provide emergency communications to ships and aircrafts. Providers' 5G network on 3.5 GHz would interfere too much with this satellite traffic. January 2023 at the earliest, the NATO 'listening station' and Inmarsat are planning to move the ground station to a new location in Greece. This means that many of the promising applications and services still cannot be offered. Too little bandwidth is available in the current bands for many of these applications and services while, in addition, the necessary 5G standalone equipment will not be introduced until the 3.5 GHz band is commercially available. The 3.5 GHz band is expected to be auctioned in 2023. It can be assumed that post-auction providers will aim for a rapid roll-out in order to recoup the necessary investments over the licence term. (Source: Monitor Wireless Technology, TNO Autumn 2022 (Dutch only)

Currently not, the largest providers (KPN, T-Mobile, Vodafone) in the Netherlands charge the same subscription fees for 5G as for 4G.

In the Netherlands, 5G has not yet been launched for industrial purposes because the 3.5 GHz and 26 GHz bands are not yet available, see question 1. However, experiments are being conducted. For example, KPN has built an experimental 5G network in the port of Rotterdam. During tests at Shell Pernis, 5G technology has been successfully tested for preventive maintenance of around 160,000 km of pipelines. 5G technology is also being used to give inspectors and engineers access to additional process plant information via tablets thanks to the application of 'augmented reality'.

5G licence holders must achieve 98% area coverage across all municipalities nationwide, with a minimum speed of 100 Mbps at the network edge. MNOs must also offer rural coverage of at least 8 Mbps in 2022.

Renewal of multiband auction licences by the Dutch Radiocommunications Agency (Verlening vergunningen multibandveiling door Agentschap Telecom, 2020)

By mid-2022, KPN reported 1 million active 5G users. For Vodafone and T-Mobile, this data was not found in public sources. T-Mobile indicated that more than 98% of the Dutch population actually gets coverage from their 5G operator. These frequencies are also accessible to stadiums such as the Johan Cruijff Football stadium, airports - for example Schiphol airport - and other special premises.

See the 5G coverage maps below. These show that all operators have extensive 5G coverage, albeit in the lower frequency bands.

KPN 5G coverage map              T-Mobile 5G coverage map       Vodafone 5G coverage map
  (Source: Monitor Wireless Technology, TNO Autumn 2022 (Dutch only)    

The 5G spectrum auction took place on 29 June 2020, with three participants: KPN, T-Mobile Netherlands and Vodafone. 

The following blocks were offered:

The auction finished with total proceeds of EUR 1.23bn. KPN, Vodafone and T-Mobile Netherlands paid a respective EUR 416m, EUR 416m and EUR 400m.

KPN and Vodafone acquired additional frequencies in the 1400 MHz band, therefore paying more than T-Mobile. The combined bids were nearly a third above the reserve price of around EUR 915m for the spectrum available in the 700, 1400 and 2100 MHz bands.

The main criteria was winning the auction with the highest bid.

In principle, any legal entity based in the EU or EEA can apply for a licence provided it complies with the licence conditions. However, tenderers are telecommunications operators because the licence holder is obliged to provide a public electronic communications service in the Netherlands: within 2 years of the licence coming into force in an area of at least 751 km2 and within 5 years in an area of at least 7,512 km2.

Admission requirements, according to Article 9 Frequency Decree 2013 (Frequentiebesluit 2013):

The licence term  for the 5G spectrum licences is until 1 January 2030.

The application should be accompanied by:

information on the applicant, including the applicant's name, registration number and extract from the Trade Register or a comparable register;

a list of persons who are authorised to duly represent the applicant (including a copy of power of attorney, where applicable);
information on the legal entities related to the applicant within the meaning of Article 3 of the capping regulation, in the form of an organisation chart showing their legal structures;

a declaration from a civil law notary concerning the accuracy these details, also stating that the applicant is not in a state of liquidation, has not been granted suspension of payments and has not been dissolved.

An applicant must provide a deposit or a bank guarantee for EUR 35.28m as security for the payment of its bid.
Other requirements:

Coverage should be provided on 98% of the surface area of each municipality in the Netherlands, with a minimum data speed.

The Telecommunications Act also includes generic provisions that licence holders must meet in full. These include authorised wiretapping and the application of other powers in accordance with the Code of Criminal Procedure and the Intelligence and Security Services Act 2017 (Wet op de inlichtingen- en veiligheidsdiensten 2017).

Frequency technical conditions

See also question 12

Decision to announce auction of licences 700, 1400 and 2100 MHz (Besluit bekendmaking veiling vergunningen 700, 1400 en 2100 MHz)

Regulations on the application and auction procedure for 700, 1400 and 2100 MHz licences (Regeling aanvraag- en veilingprocedure vergunningen 700, 1400 en 2100 MHz)

A reserve price is the minimum price for which a frequency licence is sold. This price is consequently taken as the starting price in the first round of the auction.

Calculation method: The reserve prices were adopted from Deloitte's recommendations.

Deloitte used two main methods to arrive at its recommendations: the benchmark method and the opportunity cost method. The opportunity cost method consists of two (sub)methods: the cost reduction approach and the DCF (discounted cash flow) approach.

Calculating the value on the basis of these three approaches results in a separate value range for each frequency licence. Merging them allows a total value range to be determined. The minimum value of this total value range is formed by the lower end of the benchmark valuation and the maximum value by the upper end of the DCF valuation. Based on different considerations, Deloitte determined a reserve price within this total value range.

Regulations on the application and auction procedure for 700, 1400 and 2100 MHz licences (Regeling aanvraag- en veilingprocedure vergunningen 700, 1400 en 2100 MHz)

Long term spectrum plan

The government’s Digital Connectivity Action Plan (Actieplan Digitale Connectiviteit), laid down a comprehensive plan for the development of broadband and 5G in July 2018. Following the Action Plan, the Memorandum on Mobile Communications (Nota Mobiele Communicatie) was drawn up in June 2019. The Memorandum on Mobile Communications provides a more specific policy framework on spectrum allocation in the upcoming years, thereby confirming the need for predictability of policy. 
Regulations on the application and auction procedure for 700, 1400 and 2100 MHz licences (Regeling aanvraag- en veilingprocedure vergunningen 700, 1400 en 2100 MHz)

Future tenders

At the end of December 2022, the Dutch Government sent a letter (Dutch only) to the Dutch Parliament stating that it expects that the auction of 3.5GHz for 5G can start after the summer of 2023. The Government aims to make the 3.5GHz band available for 5G by 1 December 2023. As a result, the frequencies are not likely to be available to providers until early 2024. The plan is to create two 50HMz blocks for local/private networks. The choice of this provisional band allocation of 2×50 MHz will be evaluated around 2026. If the choice is made in 2026 to shift the band allocation in the 3.5 GHz band, the choice is to implement this shift in 2030 when the next multi-band auction takes place. In the coming months, the government intends to further define the issuance policy and licence conditions for local networks so that the issuance of local licences in the 3.5 GHz band can take place as soon as possible.

The rules set out that 5G licence holders must achieve 98% area coverage of all municipalities nationwide, with a minimum speed of 100 Mbps at the network edge. MNOs must also offer coverage in rural areas with at least 8 Mbps in 2022. The administrative order on the safety and integrity of telecommunications requires that critical network elements must be procured from reliable vendors.

Issues

The main issue is the unavailability of the 3.5 GHz band. The 3.5 GHz and 26 GHz bands are expected to become available for the 5G networks in end of 2023 or early 2024. See for more information question 1.

Decisions

There are no decisions published regarding non-compliance with 5G concession obligations.

Regulations

The Telecom Code is implemented in the Dutch Telecommunications Act. Chapter 5B of the Telecommunications Act contains rules on co-location and shared use. In addition chapter 5C contains rules on shared use of facilities such as antennas.
Chapter 5B Telecommunications Act provides options for imposing co-location and sharing obligations on providers of public electronic communication networks and associated facilities. These obligations may be imposed by public authorities to protect public interests, namely the protection of the environment, public health or safety, urban planning or planning objectives.

Chapter 5C Telecommunications Act covers shared use, specifically for the public infrastructure required for the construction and operation of short-range wireless access points ('small cells'). These wireless access points are necessary for the deployment of 5G networks. The public infrastructure may consist of public buildings and installations which are part of street furniture and controlled by municipalities. These municipalities are required to publish the conditions for shared use of public infrastructure. In order to guide municipalities in this, the Dutch Radiocommunications Agency has published a "Guideline for shared use of municipal infrastructure for the placement of small cells" (Leidraad medegebruik gemeentelijke infrastructuur bij plaatsing small cells).

Guidelines for sharing mobile networks

In February 2021 the Dutch Authority for Consumers & Markets ("ACM") published Guidelines for sharing of mobile networks. With these guidelines, the ACM wishes to provide MNOs clarity about coordination of antenna site acquisition and leasing and renting out spectrum.

In the guidelines, the ACM states that it has no objection if the parties cooperate in the purchase of antenna locations in the operational phase of the roll-out. However, a precondition is that information exchange and consultation may only take place insofar as this is strictly necessary for the purpose of the collaboration. In order to maintain a level playing field among the relevant parties, the cooperation must be open to all licence holders for public mobile telecommunication services.

With regard to the leasing and letting of spectrum, the ACM believes that in many cases the cap regulation prevents a distortion of competition. Leasing frequencies to, for example, an operator of local business networks could lead to new services and increased competition. Since the spectrum auction of mid-2020, the maximum number of frequencies a single operator can use has been limited to 40 percent. The ACM is of the opinion that this limitation will ensure that, in general, competition will not be jeopardized. The letting of spectrum by MNOs to non-MNOs such as local network providers or private providers, considers the ACM not to be restricting competition in advance.

No 5G network sharing or spectrum sharing agreements are in place yet.

Since the spectrum auction of mid-2020, the maximum number of frequencies a single operator can use has been limited to 40 percent. The ACM, the Dutch regulator overseeing fair competition between companies, is of the opinion that this limitation will ensure that, in general, competition will not be jeopardized.

See also question 9.

Possible use of Chinese technology

The government published on 5 December 2019 a Decree on the Integrity and Security of Telecom Networks (Bvit) (Besluit veiligheid en integriteit telecommunicatie). The general administrative order (AMvB) creates a legal basis for excluding suppliers. Using the Bvit, the government will create a ministerial regulation that names the companies to be excluded. Suppliers may be excluded "if it is known or suspected that they intend to misuse or undermine a telecom network or service offered in the Netherlands, or have close ties with or are under the influence of a party with such an intention." The ministerial regulation naming the relevant companies has yet to be published.

A new Act on undesirable influence in telecommunication businesses (Wet ongewenste zeggenschap telecommunicatie), introducing a new investment control regime for the telecom sector, entered into force on 1 October 2020.
The new provisions include a limited list of conducts that could be considered a national security threat. This list, in essence, regards the ability of parties to disrupt or distort domestic telecommunication services.

The investment control regime comes into play when a party directly or indirectly acquires significant influence (overwegende zeggenschap) in a telecom business. Parties that intend to acquire significant influence in a telecom business must notify the Ministry of Economic Affairs and Climate. The Minister will in principle have eight weeks to decide whether or not to allow the transaction. This period can, however, be extended.

In a 2021 Ministry of Foreign Affairs study, several government leaders and experts warned against the rollout of Huawei's 5G networks because it increases Chinese access to digital infrastructure and opportunities for espionage. Following this investigation, the three major Dutch telecom providers KPN, T-Mobile and Vodafone decided to stop using Huawei's 5G equipment in their (core) networks. Huawei confirmed this in an article in the Dutch newspaper Financial Gazette (Financieel Dagblad) in 2021. However, Huawei still supplies equipment such as antennas, for the so-called edge network.

Cyber security

In October 2021, Telecommunications security and integrity regulation  (Regeling veiligheid en integriteit telecommunicatie) came into force. The Regulation is based on the Bvit and includes rules on the security measures mobile network operators must take. Some 19 organisational and technical security measures are mentioned in the regulation.