O2 boss insists on frequency extension

Telecommunications - O2 boss insists on frequency extension

In a debate whose outcome will be groundbreaking for future German mobile networks, O2 CEO Markus Haas has reiterated his demand for an eight-year extension of the current usage rights.

"If we don't get an extension, we won't have the planning security we need to close the last gaps in coverage and provide everyone in Germany with 5G," the CEO of Telefónica Deutschland (O2) told dpa in Munich. The quality of all German networks would suffer if there were to be an auction next year - there is too little spectrum to distribute among four companies.

The mobile operators use different radio bands for their mobile networks, the rights to use which have so far been auctioned off at different times. The last auction to date took place in 2019, in which the industry committed to paying 6.6 billion euros. For the first time in a long time, not only the three established providers Deutsche Telekom, O2 Telefónica and Vodafone took part, but also the newcomer 1&1.

Federal Network Agency sleeps through auction waiver

The next auction is due to take place in 2024. However, there will then be too little spectrum for it to be easily divisible by four. The Federal Network Agency has therefore proposed a waiver. However, this would be bad for the newcomer 1&1, which wants access to additional frequency bands for its currently very small network. The federal authority intends to make a final decision in spring 2024.

1&1 is insisting on "an appropriate frequency allocation", as a company spokesperson put it. When the company first took part in the auction in 2019 and committed to paying a sum in the billions, "subsequent access to additional frequencies was firmly anchored" in the award conditions. Anything else would be "legally contestable and would thwart fair competition".

The Federal Cartel Office is on 1&1's side in the debate. The competition authorities are warning against an extension as they fear negative consequences for competition and therefore for consumers. The Monopolies Commission is also concerned, but sees no better solution due to a lack of alternatives - it is only in favor of a three-year extension so that the disadvantage for 1&1 remains small.

"Win-win situation"

O2 boss Haas points out that 1&1 is not aiming for real area coverage in this decade anyway. The Montabaur-based company aims to reach at least 50 percent of German households with its antennas by the end of 2030. In areas where 1&1 does not provide its own coverage, customers are still connected to the O2 network and will be connected to the Vodafone network in future, using what is known as national roaming. "If the usage rights of the three network operators were extended until the end of 2033, genuine nationwide coverage would be possible," says Haas. "1&1 would also benefit from national roaming - that would be a win-win situation."

According to the Federal Network Agency's proposal, the usage rights are to be extended by five years. The established network operators would have to pay low fees and commit to reaching at least 98% of households in sparsely populated areas with a download rate of 100 megabits per second. So far, there is no such rule specifically tailored to rural areas, which would improve the situation in villages and towns.

"There are still tunnels from the imperial era"

In addition, every network operator will have to provide all federal highways with 100 megabits per second - until now, the requirement has only applied to the sector as a whole: if a provider does not offer a network on one route, this does not have a negative impact on the requirements if the other network operators are transmitting. However, this is of no benefit to a customer of one provider, who still has no network. When asked whether O2 could fulfill the stricter regulations, company boss Haas said: "If that is the requirement, we will fulfill it."

This would involve investments and the help of other players would be necessary, such as the railroads and authorities. "We have to intensify our cooperation with the railroads in order to really have good mobile communications in all tunnels." In some places, it is simply not possible to install antennas at the moment. "There are still tunnels from the imperial era that are listed buildings and in which we are not allowed to lay cables."