German 5G auction set for early 2019, with some strings attached

2 GHz and 3.6 GHz frequency bands are to be auctioned out in the first quarter of 2019 to build 5G networks in Germany, there is no universal coverage requirement but something close.

In May the German telecom regulator BNetzA (Bundesnetzagentur, or Federal Network Agency) announced that a 5G spectrum auction will be held in early 2019. The delay from the original plan of this year was down to the disagreement between politicians who required future successful bidders should provide universal coverage, and the more pragmatic stance of BNetzA.

On Monday 17 September, BNetzA published the consulting paper for the auction. It does not require successful bidders to provide nationwide 5G coverage, but does ask for coverage of 98% of the households as well as sufficiently good coverage along the federal and state motorways.

“We need to be ambitious but also realistic,” said Jochen Homann, President of BNetzA, in the press release. “We are already setting demanding conditions to improve mobile networks. For example, we demand data transfer speed be doubled (in 3 years).” The guideline requires successful bidders to provide coverage to 98% of household with 100Mbits/s speed by the end of 2022 and 300Mbits/s by the end of 2025. “National coverage of 5G will be excessively expensive,” added Homann.

German 5G data rate requirement (002)

Source: BNetzA consulting paper, p.112. 17 September 2018

Apparently, this does not look to have gone far enough for the politicians. In addition to the requirements for universal coverage, the politicians also demand the national operators (Deutsche Telekom, Vodafone, and Telefonica Deutschland) should provide access to competitors who do not have their own coverage. If this were to be implemented, it would open door to challenger MVNOs like United Internet (operated under the brand “1&1 Drillisch”) to 5G, offering a 4th operator legislators have long craved for.

“Attaching national roaming obligations to spectrum does help to support smaller operators and stimulate competition. So it would be an interesting addition to the license obligations to encourage a new entrant to participate in the auction,” Phil Kendall of research firm Strategy Analytics told “But politicians looking to plug a digital divide can’t just assume this is more about the stick than the carrot.”

The guidelines will go through BNetzA’s advisory board, which is composed of elected lawmakers, on 24 September, and final decisions will be made in November. The auction will take place in the first quarter of 2019, and lower band frequency more suitable for broader coverage will be auctioned in the next few years, according to the consulting paper.


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