Germany to offer unrestricted 3G concessions

23 Apr 2007

Reuters reports that Germany’s telecoms regulator, the Bundesnetzagentur (BNetzA), plans to auction a second lot of UMTS concessions in early 2008 that would allow operators to offer more services than before. The first sale in 2000 drew criticism from cellcos because the amount of spectrum fell below what they needed to offer full voice, video and data services to wireless devices anywhere in the world. ‘We will not put down any conditions saying you may offer this or that service or technology. It will be more open,’ Matthias Kurth, head of the BNetzA said in an interview. ‘Operators will also be allowed to deal in frequencies, meaning they can swap with others,’ he added. Six operatorss spent EUR51 bullion (USD66 billion) in 2000 on domestic 3G licences, but only four actually deployed services. Mobilcom returned its spectrum, and Quam, the brand name for a Telefónica-Sonera joint venture, Group 3G, halted its business in Germany in 2002.

Following preliminary meetings with interested parties, the regulator has concluded that there is more demand than frequencies available, which according to German law means an auction would have to be held. Kurth, however, does not expect prices to skyrocket like they did in 2000. ‘We have seen that those who spent billions in the end did not get a foot in the door… and I can not imagine that banks will be approving generous credit lines this time around.’ Willingness to invest in new costly licences may be limited anyway, as operators in Europe are not only struggling with falling prices in a fiercely competitive mobile market but are under pressure from the European Union to cut roaming charges. Nonetheless, Germany’s four mobile network operators, Deutsche Telekom’s T-Mobile, Vodafone, KPN’s E-Plus and Telefónica’s O2 are all expected to bid, and it is anticipated that others will join the auction. With a population of 82 million, Germany is Europe’s biggest telecommunications market.