1&1:Spectrum Allocations

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The 800 Mhz frequency

Despite getting 2 GHz and 3.6 GHz frequencies in 2019, 1&1 must get the low-band frequency (800 Mhz) to be auctioned in 2024 to be able to offer a seamless network experience to its users. This is because a network built on high-band frequencies is incapable of penetrating through walls. If 1&1 is unsuccessful in the 2024 auction, it will have to be leased it from Telefonica. However, as noted by its CEO Ralph Dommermuth during the Q1 2022 earnings call, this would be expensive. It will also reduce their competitive position. In the Q3 2023 earnings call, CEO Ralph Dommermuth said they are open to any decision that will provide them with low-band frequency in the right capacity.

Developments

January 17, 2023: Citing a study conducted by Aetha Consulting, 1&1 says there is adequate spectrum for the operation of the four networks and wants it to be fairly distributed. “All low-band frequencies in particular are in the hands of the incumbent network operators. Only one-third of the low-band frequencies will become free at the end of 2025 when the 800 MHz frequencies become available. In effect, Deutsche Telekom, Vodafone and Telefónica will in any case have unrestricted access to the other two-thirds in the 700 and 900 MHz ranges until 2034 as a minimum. If 1&1 were to be excluded from the frequency allocation, we would be blocked for many years and would not be able to operate our network competitively,” Ralph Dommermuth said. “If we are treated fairly, we are also open to alternative procedures for frequency allocation – including the extension of frequency rights." 1&1 suggests the inclusion of the less used 700 and 900 MHz in the award process to eliminate expensive bidding wars. 1&1 seems to want the three incumbent operators to relinquish 20 MHz of the low-band frequencies to them.

December 14, 2023: While presenting the 2023 Telecommunication report, the Monopolis Commission said it wants the network frequencies to be extended by a maximum of three years saying an extension by five years as proposed by the Federal Network Agency would be a “major disadvantage” for 1&1. To compensate for the disadvantage associated with this three-year extension, the Monopolis Commission recommends that the three established operators be obliged to grant 1&1 access to their network on a non-discriminatory basis and that 1&1’s concerns be “taken into account.” The Monopolis Commission only plays a secondary role as an advisor to the government.

November 9, 2023: In a position paper, the Federal Cartel Office has opposed the possible extension of frequency (800 MHz, 1,800 MHz and 2,600 MHz) usage rights, citing such extension will negatively affect competition by limiting 1&1’s network expansion. “This means that 1&1 would not only remain extremely dependent on national roaming services from other network operators during this period. Investments already made in infrastructure would also be devalued, and further network expansion without its own frequencies would be economically pointless,” the statement said. The Cartel Office seems pleased with 1&1’s network progress. “Overall, from our point of view, it is pleasing that the intended 1&1’s network launch has become increasingly more concrete since the frequency was awarded in 2019, despite generally difficult economic circumstances and delays,” the statement pointed out. However, its position is secondary, meaning the Network Agency has the final say though its opinions will be given weight.

September 13, 2023: BNetzA considers extending usage rights for spectrum in the bands of 800 MHz, 1 800 MHz and 2 600 MHz that are due to expire in 2026. BNetZa wants to reassign these frequencies five years later together with frequencies due to expire in 2033. "Our primary objectives are improving coverage for all consumers and boosting competition. We are considering extending the current usage rights to provide sufficient planning and investment certainty in the short term," said Klaus Müller, Bundesnetzagentur President. "We want to place better mobile coverage in rural areas at the centre of our requirements. A specific coverage obligation for sparsely populated regions is intended to promote equal living conditions in urban and rural areas." He added: "We also want to strengthen competition for the benefit of consumers and are presenting guidelines for this for discussion."The extended usage rights will carry obligations which include providing coverage of at least 100 Mbps for at least 98% of households in sparsely populated areas, provision of coverage with a transmission rate of at least 100 Mbps for all major roads and coverage with at least 50 Mbps for all minor roads and inland waterways, and national roaming in the form of a negotiation requirement. Comments on this interim decision should be submitted by November 6, 2023.