Germany's Federal Networks Agency has presented its draft terms for the 5G auction planned for early 2019. The proposal on the 2 GHz and 3.6 GHz bands has been sent to the regulator's advisory board, which will give its opinion on 24 September, before a final decision on the terms in November.
As previously indicated, the regulator has not included a requirement to open networks to roaming by other operators. The Bundesnetzagentur said it would not be setting 100 percent coverage requirements either, as the frequencies were not suitable for extended coverage. This follows calls from politicians as well as major business CEOs for the mobile operators to do more to cover white spots, including considering roaming agreements.
More suitable radio frequencies for improving coverage in outlying areas would be auctioned in the coming years, the regulator noted, adding that the current proposal takes account of what is "economically reasonable and legally possible". The cost of 5G roll-out should also be cheaper in future, as more fibre is available, it said.
This is in line with recent comments from Telefonica Deutschland CEO Markus Haas. In an interview with Welt am Sonntag, he said the spectrum up for auction next year is too short range to cover the current network gaps. More frequencies, such as the 700 MHz band, will need to be made available later in order to reach full population coverage in Germany, he said, while acknowledging that 100 percent geographic coverage may never be possible, due to difficulties in certain areas such as the mountains.
Voluntary cooperation
The regulator said it was opening the door to operators cooperating more in rural areas on improved coverage. However, it was not legally possible to oblige operators to open up their networks to domestic roaming and dictate prices for access. However, there are still "big cost savings" to be realised in rural areas, and the operators can negotiate commercial agreements on cooperation, the agency said.
The regulator noted that mobile users should still see improvements with the new spectrum, including a doubling of data speeds. The licences will carry a requirement to cover at least 98 percent of the population and all major freeways and highways with speeds of 100 Mbps by the end of 2022, compared to a minimum 50 Mbps under the current licences. Each operator will also be required to build at least 500 base stations to cover under-served areas, in addition to the basic population and road obligations.
Vodafone not satisfied
Just before the Bundesnetzagentur published its proposal, Vodafone Germany CEO Hannes Ametsreiter said his company was not pleased with the terms. In an interview with press agency DPA, he said it was not acceptable that part of the spectrum to be auctioned was reserved for regional licences, instead of the mobile operators. The company plans to engage in talks with the regulator before the auction terms are fixed, he added.
The conditions of use for the regional frequencies were not sufficiently detailed, and under the current terms, the regional licences could serve as a "backdoor" for a fourth network operator, the CEO said. They could start a network without having to invest much, eroding the value of investments by the operators. Financial investors could also buy up the licences cheaply and then link up the regions to create a national network, he said.
