Germany’s Federal Network Agency Bundesnetzagentur announced that the auction for 2 GHz and 3.6 GHz mobile spectrum has come to an end after 52 days and 497 rounds of bidding.
The government confirmed it will raise a total of EUR 6.5 billion ($7.31 billion) for 420 megahertz of 5G spectrum.
The process will pave the way for the entrance of a fourth operator, 1&1 Drillisch, which spent a total of EUR 1.1 billion for 70 megahertz of 5G spectrum.
Deutsche Telekom committed to pay EUR 2.2 billion for 130 megahertz of spectrum in both 5G bands, while Vodafone will spend a total of EUR 1.9 billion to acquire 130 megahertz of 5G spectrum.
Meanwhile, Telefonica Deutschland committed to pay EUR 1.4 billion for a total of 90 megahertz of spectrum.
“The end of the auction fires the starting gun for 5G in Germany. I’m pleased that four companies have acquired spectrum and will compete to expand the network for 5G. The spectrum is to be used not just for the new mobile communication standard, 5G, but also to improve mobile coverage in Germany. It is now up to the companies to put the spectrum to use quickly and to fulfill their coverage obligations,” said Jochen Homann, Bundesnetzagentur president.
The agency said that the spectrum was auctioned because the carriers wanted to acquire more than what was available.
The body also said that the new 5G mobile communication standard is intended to improve mobile broadband coverage as well as encouraging the development of innovative applications for the industry. “Businesses are reliant on powerful 5G networks to interconnect machines and equipment,” stressed Homann.
However, the announcement by the Bundesnetzagentur was followed by criticism from some of the participant operators due to the prices and the length of the process.
“The network rollout in Germany has suffered a significant setback. The price could have been much lower. Once again, the spectrum in Germany is much more expensive than in other countries. Network operators now lack the money to expand their networks,” Deutsche Telekom’s board member Dirk Wossner said in a statement.
“With the auction proceeds one could have built approximately 50,000 new mobile sites,” added Wossner, who is also managing director of Telekom Deutschland.
Vodafone Germany’s head of operations Hannes Ametsreiter said that the 5G auction as a “disaster for Germany.”
“I’m very unhappy about how long the process took and the high price that we as bidders must pay,” he told German newspaper Westdeutsche Allgemeine Zeitung.
Markus Haas, CEO of Telefonica Deutschland, told reporters that part of the money used to bid in the auction could have been used for network deployments.
“We must learn from our mistakes, and from other top 5G nations that are a good nose-length ahead of us,” he told reporters. “We have blown this chance – the money is going to the finance ministry and not into building networks,” he said.
Among the final conditions of the process are a required minimum data rate of 100 Mbps available by the end of 2022 in 98% of households in each state, all federal highways, all main roads and along the major railway routes. Also, each existing carrier must also install 1,000 5G base stations and 500 other base stations in defined areas by the end of 2022. At the end of 2024, 5G coverage should be extended to seaports, main waterways and all other road and rail routes in the country. The regulator said that the minimum coverage rules will not be applicable to new entrants.