DT takes German regulator to court over 5G auction

Deutsche Telekom has joined its main competitors in court, filing its own lawsuit against the German regulator over the 5G auction pre-conditions.

According to German newspaper Die Welt (in German), DT has found enough wrong with the pre-conditions set out ahead of the 5G auction that it will be taking the regulator to court. Some might suggest this is simply a market incumbent throwing a temper tantrum, but Telefonica and Vodafone already beat DT to the punch.

While there have been several points of contention surrounding the auction, which will take place over the next couple of months, the primary concern is focused on new players in the market. You can see what the regulator is trying to do, there is an emphasis on creating more choice for the consumer as well as correcting the digital divide, but it is going about it in a horrible way.

Looking at the conditions placed on those bidding for the valuable 5G spectrum, minimum data rates of 100 Mbps will have to be available by the end of 2022 in 98% of households in each state as well as along all major transport paths. Each of the telcos must also install 1000 5G base stations and 500 other base stations, and by 2024, the data coverage must be extended to seaports, main waterways and other minor roads.

However, DT’s main issue is focused on the lessened requirements placed on new market entrants; these companies will not have the same conditions placed on their networks, allowing them to focus on the more commercially attractive and denser urban environments. For DT, the economics simply do not add up and it feels it is being punished for having a successful business.

You do have to have a bit of sympathy for DT and other established players. Not only do they have stricter conditions and requirements placed on them, but in having to open up their networks to those who do not have infrastructure, they are being forced to help new players steal their customers. The German regulator’s intentions might have been good, but this is a shoddy set up.

Over the course of the last couple of months these rules have been criticised widely. Telefonica and Vodafone have already taken the regulator to court and the GSMA have repeatedly suggested such rules would slow the rollout of 5G across Germany, a country which already struggles with nationwide 4G.

Unless the regulator takes another look at the rules, it’s hard to see how the network operators will be incentivised to accelerate Germany’s connectivity landscape. Telcos are generally a bit grumpy and miserly with CAPEX but forcing unpopular rules on them will certainly not help matters. Most people agree a successful industry is one where the telcos and regulators collaborate; Germany clearly doesn’t agree with that sentiment.