Before a meeting of the advisory board of the regulatory authority on Monday, the head of the authority, Jochen Homann, said when asked that he could imagine “extending mobile frequencies in the short term and conditionally” and only carrying out an award procedure at a later date. Spectrum in various frequency bands will be free at the beginning of 2026. The “low band” in the low 800 megahertz range is particularly in great demand – these frequencies are important for area coverage, since antennas can use them to transmit very far.
Who is excluded?
But the situation is tricky, because in the “low band” only little spectrum is free. So far, this has been divided into three frequency packages, the current users are the three long-established top dogs Deutsche Telekom, Vodafone and Telefónica (O2). Three for three – so far an easy thing. But now 1&1 is the fourth network operator to take part. The newcomer is currently setting up his own network and definitely wants to have a range of areas for it.
According to the Federal Network Agency, dividing the spectrum into quarters and not thirds is out of the question. “Technically, it doesn’t make sense to symmetrically divide the spectrum at 800 megahertz between four network operators,” says Homann. The state would have a strong position at the auction, which was actually expected for 2023 or 2024: a scarce good is met with great interest. The auction proceeds should go through the roof.
However, it is also clear to the Federal Network Agency that that would not be good for the cause itself – i.e. good mobile phone coverage in the digital age, including growing data requirements. After all, the mobile operators would then have less money in the till for the network expansion. In any case, Homann warns that the auction of said area spectrum could “possibly lead to strong bidding competition”. That, according to the subtext, should be avoided.
Dispute between network operators
So what to do? The top dogs are in favor of extending the usage rights, which expire at the beginning of 2026, by five years. Then additional frequencies would be available and an auction could take place “under reasonable conditions,” says a Vodafone spokesman.
The competitor 1&1 has a completely different opinion. “In addition to coverage outside of large cities, the so-called low-band frequencies are also essential for indoor coverage,” says a spokeswoman. “In order to be permanently competitive as the fourth network operator, it is imperative for 1&1 to be able to acquire low-band frequencies in the 800 megahertz range in the near future in addition to the 5G frequencies auctioned in 2019.”
The Vodafone spokesman points out that 1&1 already has access to the Telefónica network and can simply continue to use it. In fact, 1&1 has so far been a so-called virtual network operator who rents capacities from other networks, especially from Telefónica. Even if 1&1 will probably activate its own network for use in 2023, the companies will remain connected via a “national roaming” contract: so that 1&1 customers do not have a dead spot in large parts of the country because their own network operator needs time to provide nationwide coverage Expansion, they are connected to O2 outside of the 1&1 network. However, this only happens in the 4G standard and not at 5G speed – a disadvantage for the customer.
The Federal Network Agency does not want to rule out 1&1 per se
In a paper from the network agency that is available to the dpa, the authority emphasizes that the frequencies should be made available “in an open, objective, transparent and non-discriminatory process”. 1&1 should also have the opportunity to “build new networks, offer mobile services and establish itself as a mobile network operator”. How this is to be done is still unclear. The question of equal opportunity access to frequencies for the fourth network operator would have to be clarified, says network agency boss Homann vaguely.
Different signals are coming from politics. The chairman of the network agency advisory board, Lower Saxony’s environment minister Olaf Lies (SPD), advocates an extension. An SPD paper, which also reflects Lies’ attitude, says that the frequency users could be obliged to meet further ambitious conditions as part of an extension, “without depriving the company of investment funds through a costly auction”. At the end of the decade, a decision should then be made on how to proceed – “then the instrument of the auction could be used again in a meaningful way at this point in time,” says the SPD paper.
Solution: “negative auction”?
The FDP member of the Bundestag Reinhard Houben, who also sits on the advisory board, is against an extension – there should rather be a “negative auction”. In such a procedure, the company that wants the least government funding and is committed to extensive expansion obligations prevails. According to Houben, progress would be made with an “efficient auction design” and strong controlling.
The network agency will probably decide in 2023 whether it will use the previous auction model, the extension of use or another approach. The question of how to proceed is “open and not yet ready for a decision,” emphasizes Homann. “Before a decision is made, a large number of procedural issues must be clarified.” (dpa/gun)