The independent German telecommunications company 1&1 Drillisch has announced that it has accepted Telefonica Deutschland‘s improved national roaming offer. Drillisch said that if a roaming agreement were to be reached with Telefonica, it would retrospectively add $41 million to its 2020 earnings, which it would book in its 2021 fiscal year.
Telefonica Deutschland and 1&1 Drillisch have agreed on the details of a new national roaming agreement after lengthy pricing disputes. Both sides claimed a positive result after the European Commission (EC) helped reach a compromise.
The companies are expanding their long-term partnership by transforming the current MBA MVNO contract into a National Roaming Agreement (NRA) under the 2014 Telefónica Deutschland and E-Plus merger remedy framework. The parties are now seeking to complete the contractual details for the NRAs by mid-May 2021.
Initially, the NRA includes a 5-year contract period that retroactively starts 1 July 2020 and can be extended twice. First, 1&1 Drillisch has the potential to extend the agreement until mid-2029. It can later be extended for up to 5 additional years. Commercial terms are set for the initial contract period, assuming a significant increase in mobile traffic on Telefónica Deutschland’s network.
“In addition, an agreement on national roaming would constitute an essential prerequisite for 1&1 Drillisch’s envisaged rollout of a high-performance 5G network,” Drillisch said in a news release.
With regards to further details of the NRA, Telefónica Deutschland and 1&1 Drillisch have agreed on confidentiality. Furthermore, Telefónica Deutschland does not expect any negative retrospective impact from the NRA on the financial results for the fiscal year 2020. Telefónica Deutschland’s financial planning and medium-term outlook remain unchanged.
Telefonica Deutschland’s Chief Executive Markus Haas said: “The agreement with 1&1 Drillisch creates long-term planning certainty and will contribute significantly to revenue and earnings. We confirm our mid-term forecasts.”