Germany’s 5G auction has not got off to a flying start

Telefónica Deutschland has filed an urgent appeal against the country’s 5G auction terms. Deutsche Telekom may follow suit.

Telefónica Deutschland was seeking to halt the country’s 5G auction by filing an appeal for injunction at an administrative court in Cologne on Tuesday 5 February. Germany was scheduled to hold the 5G auction by the end of March and was expecting to raise up to €5 billion. The key items on the terms issued by the Federal Network Agency being contested are concerning the coverage requirements, especially the coverage in rural areas and along motorways, and the mandated network sharing with competitors (the so-called domestic roaming).

Telefónica Deutschland argued that the coverage obligations could not be fulfilled with the spectrum at auction, while the frequency in its possession is already being used by other expansion requirements.

“This legal uncertainty is extremely unhelpful for the necessary massive investments in future network expansion. Billions in 5G cannot be invested on the basis of unclear rules. It must be in the interest of all involved that clarity and planning security are created here before an auction,” said Markus Haas, CEO of Telefónica Deutschland.

Telefónica was also unhappy that politicians should demand network sharing between competitors. “We have already invested €20 billion in infrastructure in Germany. We have always said that we will continue to invest if the conditions are right,” Haas told the German publication Handelsblatt late last year. However, as a condition to approve its merger with E-Plus in 2014, EU regulators already required Telefónica to make 30 percent of its capacity available to MVNOs, in this case 1&1 Drillisch.

Meanwhile Telefónica insisted that even if there would be a delay in the auction, “this would not have any influence on a large-scale launch of 5G in Germany. This is because the spectrum available for auction for this purpose will not be allocated to the successful participants until the end of 2020 anyway,” the company said in a statement.

Deutsche Telekom may also consider its position differently now. It first told Handelsblatt “we have not yet made an urgent request, to avoid delaying the auction schedule.” But in light of the new appeal from Telefónica, “we are therefore examining all legal options,” the spokesperson added.

It is not the first time the telcos have resorted to legal measures. By the end of December, Deutsche Telekom, Vodafone, Telefónica, as well as the challengers United Internet and Freenet had all filed lawsuits against the government’s rules over the upcoming auction, but none was successful in halting the process.

Deutsche Telekom, Vodafone, Telefónica, and United Internet (trading as “1&1 Drillisch”) filed applications before the deadline of 25 January to participate in the upcoming 5G auction.