5G auctions in Germany cast in doubt as Berlin contemplates compulsory roaming: Report

Network operators in Germany are expected to bid despite doubts on the design & cost of 5G auctions.

Germany’s network regulator has warned the government that its auction of fifth-generation mobile licenses could be delayed if operators are forced to offer roaming services in rural areas, the Frankfurter Allgemeine Zeitung (FAZ) reported on Thursday.

The government is mulling changes to the auction requirements that would envisage compulsory roaming in rural areas with patchy mobile phone coverage, the FAZ reported, citing a letter from the Bundesnetzagentur (BNetzA) regulator to the ministries of economy and transportation.

These new conditions would “cause considerable legal uncertainty and endanger the auction process”, BNetzA told both ministries in the letter, according to the FAZ report.

The process of determining the ground rules for 5G services that could power connected factories and wireless broadband has been fraught, reflecting concerns that Europe’s largest economy — already plagued by patchy 4G coverage — could fall further behind its rivals in the digital stakes.

A boarding at the first demonstration of 5G technology in Lisbon, Portugal on 4 June, 2018. Reuters

A boarding at the first demonstration of 5G technology in Lisbon, Portugal on 4 June, 2018. Reuters

In its letter, the BNetzA said the proposed changes to the auction requirements could lead to incalculably higher costs for the three main operators.

A spokeswoman from the German Economy Ministry declined to comment. The BNetzA and the Transport Ministry were not immediately available to comment.

Germany’s three main network operators — Deutsche Telekom, Vodafone and Telefonica Deutschland — are all expected to bid despite their reservations over the design and possible cost of the 5G auctions.

A roaming requirement could, if implemented, attract a new market entrant that lacks its own developed network infrastructure, such as United Internet, which runs virtual mobile network operator 1&1 Drillisch.

The network regulator last month set the ball rolling to auction 5G licenses, setting a 25 January deadline for submissions and saying the auction would begin in early 2019.

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