1&1 Drillisch has announced it has accepted Telefonica Deutschland’s offer for national roaming and for mobile bistream access (MBA) MVNO advance services, following a review by the European Commission (EC) which concluded that Telefonica must improve its offer. The national roaming agreement has an initial contract period of five years, retroactively starting on 1 July 2020, and may be extended twice. The terms and conditions offered by Telefonica are based on the pricing mechanisms of the first five years of the MBA MVNO agreement; in particular, the offer again includes annually decreasing data prices, which are lower than the fixed prices currently charged by Telefonica. The conclusion of a national roaming agreement is expected to take place by mid-May 2021, and will have a positive earnings effect of approximately EUR34 million (USD41.2 million) for 1&1 Drillisch in the fiscal year 2020, which would be booked as an out-of-period return in the fiscal year 2021.
An agreement on national roaming will pave the way for 1&1 Drillisch’s planned rollout of a 5G network. The parties have long been in negotiations regarding the conclusion of a national roaming agreement based on Telefonica’s commitments under the EC’s decision to approve its merger with E-Plus back in 2014. Earlier this month the EC completed an analysis of an offer submitted by Telefonica in October 2020, concluding that it was not fully in line with the firm’s merger clearance commitments and that the offer had to be improved by Telefonica.