German Regulator Considers Extending Telecom Spectrum Rights

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The German Federal Network Agency (Bundesnetzagentur) has launched fresh consultations on proposals to prolong spectrum usage rights for major telecom operators, potentially deferring a competitive auction process until the next decade. This move has reignited tensions with market entrant 1&1, which has previously contested similar initiatives.

The Bundesnetzagentur’s latest plan aims to extend spectrum licenses in the 800 MHz, 1800 MHz, and 2.6 GHz bands held by Deutsche Telekom, Telefonica, and Vodafone, originally set to expire by the end of 2025, for an additional five years. Additionally, the agency is contemplating merging this renewal with the sale of rights for other frequencies like 700 MHz, 900 MHz, 1500 MHz, and portions of the 1800 MHz band, which are due to expire in 2033.

While this delay could ease immediate financial burdens on telecom operators facing upcoming auctions, it has not been well received by all parties. Market newcomer 1&1 has historically opposed such extensions, accusing the Bundesnetzagentur of favoring established players through what it perceives as multi-billion euro subsidies.

However, the regulator has adjusted its approach in response to criticisms. The proposed modifications include mandates for the major operators to permit 1&1 to share spectrum below 1 GHz cooperatively. Additionally, existing spectrum leasing arrangements would continue, with provisions for potential national roaming if 1&1 fails to secure agreements with the big three by 2026.

Ralph Dommermuth, CEO of 1&1, expressed cautious approval of the amendments, emphasizing the importance of accessing sufficient spectrum under fair conditions to support their growing customer base and innovative technologies.

The Bundesnetzagentur contends that its plan will foster competition and improve nationwide coverage, citing ambitious obligations for rural and surface area connectivity. These requirements aim for 100 Mbps speeds in 99% of rural households by 2029, with similar targets for federal and regional roads.

While the full details of the spectrum auction remain unclear, the regulator is committed to incorporating user-experience-based coverage obligations. It has hinted at employing methods like reverse auctions to enhance rural connectivity.

The consultation will run until July 8, and with 1&1 seemingly amenable to the revised proposal, the Bundesnetzagentur appears poised to proceed with its agenda, potentially sparing major operators from immediate substantial spectrum expenditures.

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