German mobile operators — Deutsche Telekom, Vodafone and Telefonica Deutschland – need not cover all of Germany with their 5G network over the next decade, according to 5G spectrum auction policy, Reuters reported.
A recent Statista report said Deutsche Telekom, Vodafone and Telefonica Deutschland have almost equal wireless market share in Germany.
Germany is planning to conduct the auction for selling the 5G spectrum in early 2019. Three big mobile phone operators will be starting roll out of fifth-generation services in 2019 and beyond.
Mobile operators in Germany need to make investment in 5G network to cover at least 98 percent of German households in 2022 offering high-speed connection of 100 megabits per second, according to documents by the Bundesnetzagentur (BNetzA).
Deutsche Telekom, Vodafone and Telefonica have said in the past that supplying 5G all of Germany would difficult to achieve.
Germany’s antitrust regulator last week called for a fourth mobile operator to enter the market for the 5G auction, rebutting arguments from the Big Three established players that more competition would hit investment.
The intervention by cartel office chief Andreas Mundt underscored concerns that market concentration has left Europe’s largest economy lagging its rivals in the race to build connected factories or put self-driving cars on the road.
According to the BNetzA documents, mobile operators do not have to provide access to the 5G network to low-cost service providers. They can also choose whether they want to supply rural areas via so-called roaming.
The report is silent about the quantum of 5G spectrum available, base price of 5G spectrum and payment schedule for 5G spectrum in Germany.
Telecom equipment makers such as Ericsson, Nokia, Huawei, ZTE and Samsung, are looking for 5G equipment deals in Germany.
German mobile phone operators will not be required to allow national roaming when they roll-out 5G services, the country’s network agency said in the document, which could make it harder for new entrants to take on the incumbent providers.
The proposed terms for the 5G auction do not include a binding commitment to allow national roaming – which would let a new entrant rent network access where it lacks coverage – a key demand of smaller player United Internet, which is considering bidding.
Without the roaming commitment the incumbent operators can choose whether or not they want to allow the new entrants access to their networks, for example, in rural areas.
The proposed terms, which will be discussed by BNetzA’s advisory board on Sept. 24, also foresee that at least 98 percent of German households need to be supplied with a high-speed connection of 100 megabits per second by the end of 2022.
At least 50 megabits per second must be available for busy regional and long-distance railroad traffic lines.
“The coverage obligations may not be not quite as extraordinary as BNetzA describes them but at first sight do impose material Capex requirements on the network operators,” Jefferies analysts wrote in a note.
BNetzA president Jochen Homann said the government was unlikely to generate proceeds in line with those from the UMTS, or 3G, auction in 2000, which amounted to 50 billion euros ($58 billion).
Deutsche Telekom said it expected BNetzA to refrain from further regulatory interventions into the mobile phone market, adding the proposals were counterproductive.
Vodafone criticized requirements to supply federal main roads with 100 megabits per second as unacceptable, warning of high costs.
