Germany's Federal Networks Agency has approved the final terms of the 5G auction. The sale of licences for the 3.6 GHz and 2 GHz bands is expected to take place next spring. Interested bidders have until 25 January to apply with the regulator.
The reserve prices have been set at EUR 5 million each for eight blocks of 2x5 MHz in the 2 GHz band available from 2021 and EUR 3.75 million for the four blocks available from 2026. In the 3.4 GHz band, the minimum price is EUR 2 million for 20 MHz of unpaired spectrum in the 3.40-3.42 GHz range and EUR 1.7 million each for 27 lots of 10 MHz unpaired spectrum in the 3.42-3.70 GHz range.
The terms of the auction were released a week earlier, ahead of the final comments from the regulator's advisory board. Compared to the Bundesnetzgentur's original proposal in September, the final terms include increased coverage requirements for roads and rail lines, as well as efforts to encourage infrastructure sharing and local roaming in order to improve coverage in rural areas. The regulator stopped short of a call from MVNOs to require national roaming in order to encourage the entry of a fourth mobile operator, noting this would require legislation to be implemented.
Advice taken
Joachim Pfeiffer, the member of the Bundestag who chairs the advisory board, welcomed the changes in the final decision, such as the increased coverage targets and lower reserve prices to encourage investment. However, he noted that not all the board's input was accepted, and called on the regulator to "make full use" of its tools to encourage infrastructure sharing as well as monitor closely progress on the coverage targets. Higher fines for not meeting the targets may also bee needed, the board said.
To further address the problem of white spots in rural areas, he called on the federal government and network agency to work with the states on a comprehensive plan for expanding mobile coverage by mid-2019.
Operator opposition
The main mobile operators Deutsche Telekom, Vodafone and Telefonica Deutschland are still concerned that the licences carry too many conditions and that the government is out to encourage a new entrant rather than support investment in networks. Vodafone and industry group Bitkom have already suggested that legal action may be necessary.
In a statement, Vodafone said it reserves the right to appeal the terms, as it sees no legal basis for the obligation imposed to negotiate with other service providers over access to its network. Such a requirement assumes a dominant position, but "such a company does not exist on the German market", the company said, defending the current competitive balance. Furthermore the regulator's decision refers to potential change to the Telecommunications Act to facilitate roaming, creating uncertainty for any bidders, Vodafone said.
Deutsche Telekom said that the increased coverage terms will hold back the roll-out of 5G in Germany and go "well beyond what the Federal Network Agency previously described as reasonable and proportionate". The operator also called any attempt to impose a national roaming requirement "hostile to investment", noting the country already has the longest procedures for setting up mobile antennas. It also rejected the notion put forward by SPD and CDU politicians of legislation to impose roaming and network access, saying the auction "in the end is the plaything of politics to the detriment of the digital climate in Germany".
The consumer rights group VZBV said such legislation may be the only way to ensure wider mobile network coverage and stimulate competition in the German mobile market. It said the auction terms are disappointing from a consumer point of view and will further cement the "already stagnating competition".
