The BNA, Germany’s telecoms regulator, has approved the auction of the digital dividend frequencies to mobile network operators for mobile broadband services, to take place in the first half of next year.
It will be the biggest digital frequency auction since the allocation of 3G licenses in 2000.
The low-frequency 800MHz spectrum in Germany, ideally suited for carrying mobile broadband over long distances, will be available following the switchover from analogue to digital terrestrial television.
The situation parallels that of the UK, where Orange and T-Mobile occupy the higher 1800MHZ spectrum and want incumbents O2 and Vodafone to cede a part of their 900MHz band if they are to have any say over the future of the 800MHz spectrum to be made available with digital switchover.
The smaller networks in Germany have requested the BNA put limited bidding rights on the larger players when the auction takes place in 2010.
As the earlier entrants to the German market, T-Mobile and Vodafone own larger chunks of the existing 900MHz band than their counterparts.
Telefónica’s O2 Germany and KPN’s E-Plus claim T-Mobile and Vodafone Germany have an unfair advantage over them already, and that they should reallocate some of the 900MHz spectrum already in use if they are to compete equally in bidding for the 800MHz band.
Indeed, EU commissioner Viviane Reding (pictured) called upon the BNA ahead of it green-lighting the auction to consider the favour the lead operators have in the market.
The BNA’s advisory council responded by stating that it was “surprised” by the attempts to influence the decision, and duly issued terms that permit each operator to buy a maximum of 20 MHz of the band to be distributed and do not require the incumbents to cede any of their existing spectrum.
IHS Global Insight telecom analyst Aapo Markkanen remarked: “There is a realistic chance the auction will put further consolidation pressure upon the intensely competitive German mobile market.
“With its parent company KPN clearly smaller than those of the three others, it is basically E-Plus which risks either overbidding or being left without enough spectrum – a scenario which the company’s management has played down but which obviously is being examined within KPN nonetheless.”