Bundesnetzagentur will auf milliardenschwere Mobilfunkauktion verzichten

The upcoming auction of mobile frequencies in Germany, which was supposed to take place soon, will be postponed as the Federal Network Agency has decided to forgo the billion-dollar auction for now. Instead, the network operators Deutsche Telekom, Vodafone, and Telefónica (O2) will be allowed to continue using certain frequencies for another five years, as announced by the regulatory authority. In return, the companies will pay relatively low fees. The last frequency auction in 2019 generated approximately 6.6 billion euros for the government.

The reason for the decision is that the available spectrum would likely not have been sufficient for four good networks. Currently, the frequencies are being used by three operators. However, newcomer 1&1 would also participate in an auction for usage starting in 2026. This means that four companies would bid, and one of them would miss out – this would then have very poor chances in the market because its network quality would be low. Through the extension, 1&1 does not receive its own additional spectrum. However, since the company is allowed to share the Vodafone network, this is not considered too problematic from a regulatory perspective.

Entscheidung fällt 2024

The proposal of the Federal Network Agency is now undergoing a consultation process, where market participants can express their opinions. The decision is expected to be made in early 2024.

In return for the extension, Telekom, Vodafone, and Telefónica are expected to commit to improving their network in sparsely populated areas and along transportation routes. „We want to prioritize better mobile coverage in rural areas,“ said authority chief Klaus Müller. By considering the extension of usage rights, the companies are being provided with planning and investment security.

The three companies had advocated for an extension of usage rights. 1&1 CEO Ralph Dommermuth had stated in a July interview with SPIEGEL that he had no objection to a fair extension of 5G spectrum, following the example of France. He mentioned that in France, three network operators were expanded to four, and a newcomer was also considered. Dommermuth expressed trust in the country and the regulatory agency, stating that it would not be the three companies who shout the loudest and prefer to stay among themselves who will prevail. Now, 1&1 is publicly withholding judgment and has announced that they will review the document.

„Ich kann es nicht umformulieren.“

The authority intends to issue regulations.

The authority aims to ensure that companies continue to invest a significant amount of money in their network and provide consumers with good connections through a set of requirements.

According to the obligations set in the 2019 auction, Deutsche Telekom, Vodafone, and Telefónica (O2) are required to provide complete coverage of highways and important federal roads with a download speed of 100 megabits per second since the beginning of the year. In reality, the coverage has improved in recent years, but there is a catch: the mandatory 100 percent referred to the industry as a whole. If one network operator did not cover a section, but another did, the requirement was considered fulfilled – even though customers of the first provider had no network connection during their journey on that particular highway. According to the plans of the regulatory agency, this counting towards fulfillment will be eliminated by 2029.

There will be no new strict requirement for the railways, on the other hand. It is stated that it requires „a collaboration between mobile network operators, railway infrastructure companies, and train operators“. The vague wording is due to the fact that a poor network on the train is not always attributable to deficiencies of the network operators, but can also be caused by shielding train windows and other factors.

Fokus auf dünn besiedelte Gebiete

In another aspect, the regulatory agency also aims to improve the situation for mobile phone users. In areas with less than 100 inhabitants per square kilometer, 98 percent of households should have access to 100 megabits per second. Although there is already a 98 percent requirement, it applies to households in a whole state – the sparsely populated areas often have poor networks due to the high cost of antennas in small towns for network operators, who tend to focus on expanding in areas with more people.

If we consider the example of Baden-Württemberg, approximately 90 percent of households in sparsely populated areas are reached by antennas with a speed of 100 megabits. In Rheinland-Pfalz, it is only about 93 percent. The reception in small villages is expected to significantly improve in the coming years.

Es wäre nicht das erste Mal, dass Nutzungsrechte für Netzfrequenzen verlängert werden. 2005 hatte es dies schon einmal gegeben. 2000, 2010, 2015 und 2019 gab es hingegen Versteigerungen unterschiedlicher Frequenzbereiche.