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Multiband CCA frequency spectrum auction in Montenegro

EKIP Montenegro

2016

Consulting and execution of Multiband Auction 800/900/1800/2000/2600 MHz for EKIP, Montenegro

In 2016, Specure provided auction consulting and support services for spectrum auctions of next generation mobile services in Montenegro for Montenegro’s telecommunications regulator EKIP. Specure also provided own configurable internet-based electronic auction platform for running a CCA auction.

Background information

In January 2015, the process of preparing for the first national multiband frequency auction was started in Montenegro. Despite lot of theoretical preparation on the agency’s side, EKIP made a decision to introduce outside consultants in addition to its own staff, in order to guarantee successful outcome if this very important frequency auction. In June 2015, as a result of a public tender, Specure was considered the best choice to carry out the project.

Consultation on the auction process

During the process of planning of the very complex multi-band frequency auction Specure provided expert advice on a various topics related to the frequency auction process, including:

  • selection of the appropriate auction format and explaining advantages and disadvantages of various options,
  • the most beneficial auction set up including a pre-auction and the main auction,
  • division of the available spectrum into several categories,
  • minimum prices for the individual categories,
  • spectrum caps and spectrum floors according,
  • preparation of information memorandum for the bidders and the general public,
  • preparation of detailed auction rules.

 

Specure Electronic Auction Platform

Specure provided expert advice on technical aspect of the auction implementation using software tools over the internet. A set of Specure’s in-house tools were used during the process. Specure also trained EKIP staff on the use of the software and in the overall administration of the process, supported EKIP with live auction management and provided a post-auction report.

Developing, Implementing and Operating Spectrum Auctions Over the Internet

The technical part of the project was initiated in late 2015, a fully functional and pre-configured auction platform was delivered in March 2016. Specure worked directly with the EKIP to implement auction rules, and managed the auction on behalf of the EKIP. Specure also conducted bidder information sessions as well as a help line to support the auction, and provided on-site support during the auction.  

The auction platform included:

Auction simulation tool – in the preparation phase for the auction, bidders were allowed to use a powerful auction simulation tool. The tool allowed bidders to submit various CCA auction scenarios in a xlsx format, and download the simulation results instantly. The auction simulation tool uses the same engine as the auction platform itself so various assumptions and what-if scenarios could be simulated. The Auction simulation tool was very well received among the bidders’ community and its presence contributed greatly to the overall satisfaction with the technical implementation of the auction procedure.

Auction Manager Interface - permitted the auction manager/regulator to create an auction; set up lots/blocks and bidders; configure auction parameters such as bid/price increment calculation rules, , activity rules, and closing rules; and communicate with the bidders/operators via announcements and bidder messages.

The Auction Manager Interface allowed the administrator to manage the auction by setting up and managing round schedules, and setting increments and various other parameters for the next round. This interface also provided a consolidated reporting module, which allowed the auctioneer to view all bidding activities and monitor real time bidding activity.

Bidder Interface - included a countdown clock function; auction and bidder summary; bid validation and submission; automatic round extensions according the auction rules; and information/reports regarding the current prices in the clock phase and supplementary phase, a summary of number of bids by lots/blocks according the transparency level as defined in the auction rules and all assignment options for the assignment stage.

Backup Bidder Role - allowed the regulator to place bids on behalf of the bidder/operator in case the bidder had technical/logistic issues during the bidding round, which allowed the bidder to call in or send facsimile message to place bids or bidding action on their behalf.

Infrastructure and Hosting - a secure and reliable information technology infrastructure and hosting for testing purposes and for the live auction, including the implementation of an auction system fulfilling reliability and restart procedures along with secure authentication of bidders and EKIP staff over the Internet

The auction platform included the following design and specifications requirements:

  • Setting up 2 separate auctions – a pre-auction and the main auction
  • The pre-auction consisted of:

–     two blocks of 2x5MHz in one category in the 800MHz range,

–     six blocks of 2x5MHz in two categories in the 900MHz range,

–     twelve blocks of 2x5MHz in two categories in the 1.8GHz range,

–     six blocks of 1x5MHz and nine blocks of 2x5MHz in two categories in the 2GHz range,

–     four blocks of 2x5MHz in one category in the 2.6GHz range.

  • The main auction consisted of:

–     six blocks of 2x5MHz in two categories in the 800MHz range,

–     five blocks of 2x5MHz in one category in the 900MHz range,

–     eleven blocks of 2x5MHz in one category in the 1.8GHz range,

–     four blocks of 1x5MHz and three blocks of 2x5MHz in three categories in the 2GHz range,

–     ten blocks of 1x5MHz and fourteen blocks of 2x5MHz in two categories in the 2.6GHz range.

  • Configuration of spectrum caps and spectrum floors according to EKIP’s specification;
  • Automatic increment on categories for which demand is larger than supply, which could be overridden depending on demand of each category. The software allows for freely configurable bid increments per category,
  • Verification of results prior to each round for the auctioneer before publishing results to the bidders and public,
  • Custom report for the public and media to report on auction progress, prices, and demand on blocks.

Specure analyzed EKIP’s auction rules and provided feedback regarding the affect and impact of certain auction rules. The software platform was independently tested by Smith Institute for accuracy of the results and overall reliability. During the testing phase, Specure provided remote support to EKIP in addressing any questions.

After deploying the auction system, Specure trained EKIP staff onsite for conducting the full auction life cycle with the new system. These training sessions covered such topics as creating and setting up an auction, managing a live auction (e.g., round schedule, bid settings, announcements) and submission of bid activity (placing bids, cancelling bids, placing waivers), as well as recommendations for workflow processes and advising how to set-up the auctioneer room including security considerations

Specure also customized user manuals in English and Montenegrin languages for EKIP’s needs and provided supporting documentation as reference material for the auction operators and auction administrators. 


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