5G licences auctioned for €6.6bn to telco companies

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  • The state is earning much more than expected: around 6.6 billion euros. These are to flow into digitilisation efforts.
  • Deutsche Telekom paid the most, followed by Vodafone, Telefónica and Drillisch.
  • After 497 rounds and 12 weeks the longest auction of German mobile radio frequencies is over.

The auction of 5G mobile frequencies is closed. According to the Federal Network Agency, the four participating companies – Deutsche Telekom, Vodafone, Telefónica (O2) and Drillisch (1&1) – are paying the state a total of almost 6.6 billion euros. This is significantly more than expected: Experts have estimated the figure at only three to five billion euros.

The longest auction of German mobile frequencies has thus ended – after 497 rounds of negotiations. For more than 12 weeks, the four providers have repeatedly outbid each other. With the end of the auction, an important milestone was reached for the introduction of the fifth mobile generation (5G).

At the licence auction in 2015, 5.08 billion euros had been raised. One reason for the higher value: This time four network operators took part and not just three as four years ago. Newcomer Drillisch proved to be a willing bidder. The money goes to the federal government, which wants to invest it in digitilisation – for example, to promote broadband expansion in rural areas.

Frequencies to improve mobile phone coverage

Deutsche Telekom pays the most, around EUR 2.17 billion, followed by Vodafone with EUR 1.88 billion and Telefónica with EUR 1.42 billion. Drillisch has to pay 1.07 billion euros – the subsidiary of the Rhineland-Palatinate company United Internet has not yet had its own network, but instead has used the antennas of its competitors. Blocks in the 2 gigahertz and 3.6 gigahertz frequency ranges were auctioned off. The 2 GHz blocks were significantly more expensive, as higher ranges can be achieved in this frequency range. However, these blocks can only be used from 2021 or even 2026.

“Telekom has received the spectrum it wanted,” says a spokesman for the group. “Nevertheless, the auction left a bitter aftertaste. The result is a setback on the network expansion,” the spokesman continued. “This time too, the spectrum in Germany is much more expensive than in other countries. The money spent for the auction will be lacking for the network operators in Germany.”

The head of the Federal Network Agency, Jochen Homann, spoke of a “starting signal for 5G in Germany”. “The frequencies will not only be used for the new mobile standard 5G, but also for better mobile coverage in Germany”, said Homann.

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