Selling spectrum in the presence of shared networks: The case of the Israeli 5G auction

The Israeli 5G auction that took place in August 2020 used the Combinatorial Clock Auction mechanism adapted to the Israeli market. We review the challenges that the Israeli Ministry of Communication faced while designing the auction and discuss the strategic consequences of the design. We highlight the special characteristics of the Israeli telecommunication market and, in particular, the fact that most operators share their antenna networks and their spectrum assets with other auction participants, but spectrum licenses need to be purchased by each operator individually. The Israeli Ministry of Communication required operators sharing the same networks to submit joint bids in the auction. We discuss the implications of this decision on the efficiency of the auction, and the difficulties it caused the bidders. We discuss the effect of further incentive schemes that accompanied the auction, and we also describe some signaling opportunities that emerged during the auction process.