Germany plans spectrum auction despite operator opposition

Germany’s telecoms regulator is planning to hold an auction of new and existing frequencies as early as next year in response to rising demand for mobile broadband services and despite opposition from the country’s operators.

In a statement published on its website, the Bundesnetzagentur said it would look to auction in-use 900MHz and 1800MHz frequencies as well as new spectrum in the 700MHz and 1.5GHz bands.

Germany’s telecoms regulator is planning to hold an auction of new and existing frequencies as early as next year in response to rising demand for mobile broadband services and despite opposition from the country’s operators.

In a statement published on its website, the Bundesnetzagentur said it would look to auction in-use 900MHz and 1800MHz frequencies as well as new spectrum in the 700MHz and 1.5GHz bands.

Operators including Deutsche Telekom (Bonn, Germany), Vodafone (Dusseldorf, Germany), Telefonica (Munich, Germany) and E-Plus (Dusseldorf, Germany) have been using the 900MHz and 1800MHz spectrum to support their 2G services, although some 1800MHz airwaves have been refarmed for use with LTE services.

The licenses allowing operators to use those bands are not due to expire until 2016, and operators have reportedly been urging authorities to extend the permits until 2018 or later.

But the Bundesnetzagentur insists it has no choice but to hold an auction.

“The 2016 expiring frequencies are scarce,” said the regulator. “The business demand is greater than the available spectrum. The agency is therefore legally obliged to conduct an auction.”

An auction scheduled for as early as 2014 would undoubtedly add to the financial pressure on Germany’s operators, which face tough regulation and challenging conditions across Europe.

It would also come on top of 4G spectrum auctions across the region that have already squeezed operators’ cash resources.

Germany’s own 2010 auction raised nearly €4.5 billion ($5.9 billion) for government coffers, while E-Plus owner and Dutch incumbent KPN (The Hague, Netherlands) was forced to slash dividends after spending far more than expected during a 4G auction in the in the Netherlands late last year.

German authorities say a block of 900MHz spectrum held by each of the four network operators would not be auctioned off under the new plans.

“The current nearly universal coverage of consumers with infrastructure for mobile communications must still be secured, especially in rural areas,” said Jochen Homann, the Bundesnetzagentur’s president, explaining the proposal.

Operators have been given until October 4 to provide comments on the Bundesnetzagentur’s plans.