German 5G Auction Ends With Companies Pledging EUR6.5 Billion for Spectrum
June 13 2019 - 7:14AM
Dow Jones News
By Patrick Costello
--Germany's 5G spectrum auction ended late Wednesday with
telecom companies pledging over EUR6.5 billion for frequencies
--Deutsche Telekom spent more than its peers for spectrum
--The auction costs exceeded companies' and analysts' initial
expectations
Germany's 5G spectrum auction ended late Wednesday with the
country's main telecoms operators pledging to pay over 6.5 billion
euros ($7.36 billion) for frequencies on the 5G mobile
spectrum.
Deutsche Telekom AG (DTE.XE), Telefonica Deutschland AG
(O2D.XE), Vodafone Germany and 1&1 Drillisch AG (DRI.XE)
pledged a total of EUR6.55 billion in 497 rounds of bidding for
licenses to 41 blocks of spectrum, said the Federal Network Agency,
Germany's telecoms regulator and the auction organizer.
The auction kicked off on March 19 and lasted nearly three
months, ending last night only when operators ceased submitting new
bids. Companies bid for frequencies to build up 5G networks that
will be used by consumers and industry.
Deutsche Telekom outspent its rivals, securing 13 blocks of
frequencies for EUR2.17 billion. Vodafone Germany spent EUR1.88
billion on 12 frequency blocks, while Telefonica Deutschland spent
EUR1.42 billion on nine frequency blocks.
1&1 Drillisch pledged EUR1.07 billion for seven frequency
blocks. The company is aiming to become Germany's fourth mobile
network operator having now won spectrum.
Still, companies criticized that the final costs for 5G spectrum
were too high, saying this deprives them of funds to build up their
next-generation mobile networks.
"Once again, the spectrum in Germany is much more expensive than
in other countries," Deutsche Telekom board member Dirk Woessner
said. "Network operators now lack the money to expand their
networks."
Analysts likewise said the auction costs exceeded initial
expectations and came in too high.
"The high cost at which the German 5G spectrum auction settled
is a setback for the industry," Jefferies said, calling the auction
an "unexpectedly drawn-out process."
Deutsche Bank's Nizla Naizer said the final price tag came in
EUR1.5 billion ahead of the bank's initial estimate of EUR5
billion, adding that "all eyes" would now turn to 1&1's plans
for rolling out its new network.
Write to Patrick Costello at patrick.costello@dowjones.com.
(END) Dow Jones Newswires
June 13, 2019 06:59 ET (10:59 GMT)
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