Federal Network Agency extends rights of use for mobile radio frequencies

Contents

The planned extension of the rights of use for mobile frequencies has been approved. After the Advisory Board of the Federal Network Agency gave its approval at its meeting on Monday, nothing now stands in the way of the regulatory authority's plan. The rights of use of the three mobile network operators for frequencies in the 800 MHz, 1.8 GHz and 2.6 GHz ranges will thus be extended by five years until 2030.

The rights of use that have now been extended would have expired at the end of 2025. The extension is linked to further expansion requirements. "We are improving mobile coverage for all consumers and promoting competition," says Federal Network Agency President Klaus Müller, emphasizing that the coverage requirements are ambitious.

No expensive auction

The Federal Network Agency had already brought a possible extension in 2023 into play instead of reallocating the rights. Once the extended usage rights have expired, the frequencies are to be reallocated together with additional spectrum. Until now, the regulatory authority had auctioned off expiring usage rights.

The Federal Network Agency is thus at least sparing the established network operators Telefónica (O2), Telekom and Vodafone an expensive auction: when the 5G frequencies were awarded in summer 2019, the three and newcomer 1&1 together paid 6.5 billion euros. For 1&1, the extension means that the company will not be able to acquire any more frequencies for its network for the time being.

To ensure that 1&1 is not completely left behind, the established network operators were obliged to negotiate with the newcomer for access to at least 2×5 MHz of the coveted 800 MHz frequencies. 1&1 should be able to use these frequencies where its own network is already expanded, for example to ensure better coverage indoors.

The authority is linking the extension of usage rights for the three established network operators to 1&1 gaining access to spectrum in the 800 MHz band by January 1, 2026. It does not matter how and with whom 1&1 ultimately comes to an agreement – the condition is considered fulfilled if the spectrum is given to the newcomer.

Shared use and roaming

If no agreement is reached, the Federal Network Agency reserves the right to "order shared use vis-à-vis one of the allocation holders", as stated in the decision published on Monday.

Following the same pattern, the Federal Network Agency is ordering negotiations on national roaming in order to give the new network operator fast access to the overall market. Here, 1&1 has already agreed on a roaming contract with Vodafone. In the opinion of the Federal Network Agency, Vodafone is therefore also the natural candidate for initial negotiations on 800 MHz frequencies.

1&1 now wants to talk to all three network operators quickly. "In order not to lose any time in the negotiations for access to the important frequencies below 1 GHz, we are approaching Telekom, Vodafone and Telefónica directly," says CEO Ralph Dommermuth. "We are confident that this will succeed and trust in fair offers and the support of the Federal Network Agency."

The extension is also linked to extended expansion requirements for the network operators. By 2030, the networks must enable a bandwidth of 50 megabits per second across 99.5% of Germany; according to the network operators, this figure is currently around 98%. In addition, 99% of households in "sparsely populated communities" in each country are to be supplied with at least 100 Mbit/s by 2029.

From 2029, 100 Mbit/s should also be available without interruption on all federal highways, and 50 Mbit/s for rural roads and inland waterways. From 2030, district roads must also receive 50 Mbit/s. Network operators must also continue to expand coverage along railroad lines.

"Toughest requirements in Europe"

"The suspension of the auction marks a fundamental change of course, with the focus now shifting to concrete expansion combined with clear coverage requirements, binding monitoring and the goal of nationwide network coverage," explains the Chairman of the Advisory Board, Lower Saxony's Minister of Economic Affairs Olaf Lies (SPD). "Mobile coverage always, everywhere and for everyone is within reach."

O2 CEO Markus Haas sees the frequency extension as a "game changer for Germany". "It lays the foundation for the best digital coverage for people and businesses in this country." Marcel de Groot, Head of Vodafone Germany, is relieved that there will now be no expensive auction and that more money can be invested in the network as a result. However, it is also clear that these are "probably the toughest conditions in Europe".

The Federal Network Agency could not bring itself to impose a strict obligation on network operators to provide network capacity to mobile network providers – Here too, there is only a comparatively soft negotiation requirement. The German Federal Cartel Office, the Monopolies Commission and the window network operators had called for a service provider obligation in order to be able to offer bundled tariffs with mobile telephony under their own flag.

"Practically useless guard rails"

The German Broadband Association (Breko) sharply criticizes the frequency extension. "Instead of finally creating effective competition in mobile communications, the Federal Network Agency continues to protect the mobile top dogs Telekom, Vodafone and Telefónica from unwelcome competition," says Sven Knapp, Head of the Breko capital office. "Instead of practically useless 'guard rails' for the unsuitable negotiation requirement, the authority should have introduced a service provider obligation."

Meanwhile, 1&1 is already staking its claim for a future auction. It should "not be ignored that the extension of large frequency volumes is tantamount to a one-sided subsidization of our three competitors," says Dommermuth. "This must be compensated for by analogous rules for us as the fourth network operator at the latest at the next frequency allocation to enable sustainable competition on an equal footing."

(vbr)