On May 27, 2015 the German regulator, the Bundesnetzagentur (BNetzA), fired the starting gun for a multi-band auction comprising 270MHz of spectrum across the 700MHz, 900MHz, 1500MHz, and 1800MHz bands. Telefonica Germany, Telkom Deutschland, and Vodafone are all competing in the ascending simultaneous multi-round auction. However, despite Germany being the first country in Europe to award the 700MHz band – amid much hype – the 900MHz band has proved most popular as bidding has got underway.
The switch to DVB-T2 has freed the 700MHz band for mobile broadband use, as opposed to terrestrial television. In total, 2×30MHz of spectrum in the 700MHz band will gradually come to be used for mobile broadband. Although Germany has beaten the rest of Europe to the starting blocks, the actual deployment of networks in this band is not going to be possible until 2017 at the earliest.
The auction was still ongoing at the time of writing and had already raised enough to meet the reserve prices set by BNetzA. However, bidding – particularly for the 700MHz band – looks to have stalled at approximately €75m per block, or €0.09/MHz/PoP ($0.10/MHz/PoP). Conversely, spectrum blocks in the 900MHz band have risen from €75m to approximately €105m for most blocks. This is the equivalent of jumping from €0.09/MHz/PoP ($0.10/MHz/PoP) to €0.13/MHz/PoP ($0.14/MHz/PoP).
The relative lack of enthusiasm so far for the 700MHz licenses can partly be attributed to the license conditions. BNetzA has stipulated that winning license holders must provide broadband coverage to at least 97% of households in each federal state and at least 98% of households nationwide, as well as provide a minimum transmission rate of 50Mbps per cell in order to ensure that households get an average transmission rate of 10Mbps. Germany is no stranger to challenging rollout obligations, having carefully designed the award of 800MHz spectrum with coverage in mind. As part of that award, the regulator required license holders to roll services out to rural parts of the country before they could launch services in the more profitable urban areas.
The 900MHz and 1800MHz bands have long been used by mobile operators to provide service and have been included in this multiband auction because the usage rights expire at the end of 2016.
Germany (Country Regulation Overview), TE0007-000827 (September 2014)
Superfast-Access Policy Tracker: 2014, TE0007-000825 (September 2014)
“A three-stage approach is key to the EC’s UHF spectrum strategy,” TE0007-000848 (November 2014)
Matthew Howett, Practice Leader, Regulation
Europe, Middle East & Africa team - +44 (0) 207 017 7700
Asia-Pacific team - +61 (0)3 960 16700
US team - +1 646 957 8878
Already an Ovum client? Login to the Knowledge Center now