The German Federal Network Agency said that the 5G auction has ended with EUR 6.5 billion offered in total by the four bidders, after 497 rounds of bidding. After three months of bidding, the four operators signaled relief that the auction was over, while some were dissatisfied with the high price paid.
The auction paves the way for the launch of a fourth network operator in Germany, 1&1 Drillisch. The subsidiary of United Internet acquired two frequency blocks of 2x5 MHz in the 2 GHz band and five blocks of 10 MHz in the 3.6 GHz band for a total price of just over EUR 1 billion.
The company said it is now able to build a 5G network. It achieved its goal to become the fourth network operator, which it describes as a new chapter in the company’s history. As the fourth network operator, 1&1 will contribute to making Germany the lead market for 5G and opening up new business opportunities, it said in a statement.
High price
Market leader Deutsche Telekom accounted for the highest spend, at EUR 2.17 billion in total bids. This includes four lots of a total 2x20 MHz in the 2GHz band and nine blocks of 10 MHz unpaired spectrum in the 3.6 GHz band. Telekom has “the spectrum it wanted” to be able to build a 5G network, said director Dirk Wossner, but the auction has been expensive. The proceeds could have been used to build approximately 50,000 new mobile sites and close many white spots, Wossner noted.
Vodafone acquired the same amount of frequencies for a lower price of EUR 1.88 billion. In the 3.6 GHz band, the company acquired 90 MHz for EUR 1 billion. In the 2.1 GHz, it bought 40 MHz for EUR 806 million, with 2x15 MHz available from 2021 and 2x5 MHz available from 2026, each licensed until 2040.
Vodafone agreed with Telekom's assessment of the auction cost. The company said it would be important to build cooperation between politics and industry to develop a reinvestment program to use the proceeds for the expansion of mobile communications.
Telefonica Germany bid EUR 1.42 billion for nine lots. The operator said its comprehensive spectrum holdings will help it face the competition in the market. The company acquired total spectrum of 90 MHz, including two paired blocks of 5 MHz in the 2.1 GHz range and seven unpaired blocks at 3.6 GHz.
Including the existing spectrum, Telefonica has 310 MHz of mobile spectrum with effect until the end of 2025, the company said in a statement. According to its CEO Markus Hass, the new spectrum optimizes the network management and opens the way to new business segments. The spectrum will, in a first step, supply in particular built-up conurbations and industrial sites.
A total of EUR 2.3 billion in bids were lodged for the 2 GHz frequency range, with Vodafone paying the highest amount of EUR 213.8 million for one block. In the 3.6 GHz frequency range, bids totaled EUR 4.2 billion, and Telekom offered the highest amount of EUR 148.4 million for one block. The reserve prices were as little as EUR 3.75 million for 2x5 MHz in the 2GHz range and EUR 1.7 million for 10 MHz in the 3.6 GHz range.
