The Bundeskartellamt argues that conditions attached to the proposed extension of spectrum usage rights would harm new entrant 1&1 and hinder wholesale competition
Proposals to extend spectrum usage rights by five years come with measures to protect competition in the mobile market
On 29 January 2025, the Bundeskartellamt (Germany’s competition authority) published a statement on the potential extension on mobile spectrum licences in the 800MHz, 1800MHz and 2.6GHz bands. These frequencies are the subject of a recent draft determination from BNetzA (Germany’s telecoms regulator), that proposes to extend the licences for their use by five years to the end of 2030, but also signals a future "competitive procedure” – i.e. a spectrum auction – once terms eventually expire. The proposal reflects interventions in other EU Member States, including Spain where the Government has extended spectrum licences by up to 10 years at no cost to operators in order to encourage network investment. BNetzA’s draft decision, announced at a public hearing on 9 January, outlines measures to promote competition in the context of the potential extension of usage rights. These would be supplemented by “guard rails” designed to define the planned negotiation requirement between mobile network operators and service providers, including mobile virtual network operators (MVNOs).
The guidelines for network access for service providers received particular scrutiny at a public hearing
According to Klaus Müller (President, BNetzA), the regulator’s two main objectives are improving mobile connectivity and boosting competition, and it is looking to attach ambitious coverage obligations (especially in rural areas) to any extension of spectrum usage rights. This would be accompanied by “special arrangements” for 1&1, Germany’s new entrant operator, such as obligations on the three incumbent mobile network operators (Deutsche Telekom, O2 and Vodafone) to engage in negotiations over national roaming, infrastructure sharing or access to sub-1GHz spectrum upon request. A particular focus of the hearing was the requirement relating to service providers, which would mandate that spectrum holders engage in negotiations with service providers and MVNOs on sharing wireless capacity. BNetzA’s provisional guidelines to ensure non-discriminatory negotiations are based on five pillars:
Reasonable contract periods that are not inflexible or unfair because they are excessively short or long;
Reasonable notice periods that promote stable and equal contractual relationships;
Reasonable contract conditions, including fair and transparent pricing, enabling service providers and MVNOs to offer competitive services in the retail market;
Reasonable migration rules that do not prevent the migration of the retail customers of a service provider or an MVNO to a new wholesale provider without an objective reason; and
Unreasonable exclusivity rules should not allow a host operator to tie a service provider or an MVNO exclusively to them without an objective reason.
The Bundeskarterllamt considers the draft rules come up short and require adjustment, for example to support new entrant 1&1
However, Andreas Mundt (President, Bundeskartellamt) has stated that while the guidelines presented by BNetzA generally address the right problems, overall they fall well short of what’s required. In the competition authority’s view, they should be more consistently geared towards protecting competition by service providers from an imbalance of power with the established network operators. According to Mundt, it appears that the guidelines would allow for a ban on the resale of wholesale services by 1&1 as a condition of any roaming or cooperation agreement between it and the three incumbents benefiting from the licence extension. The Bundeskartellamt views this critically, considering that it would set back by years the hope of stimulating competition in the wholesale market, which was expected following the market entry of 1&1 as the fourth network operator. The authority therefore sees the need for adjustments in the design of the measures so as not to restrict 1&1's competitive opportunities compared to its rivals. Those operators have also previously criticised BNetzA’s proposals, with Tim Höttges (CEO, Deutsche Telekom) calling the draft coverage obligations disproportionate, expensive and unrealistic. BNetzA gave interested parties two weeks (until 23 January 2025) to comment on the draft guidelines and the content of the hearing. It is currently reviewing feedback and plans to make a final decision on the relevant spectrum bands “as soon as possible” in order to create legal and planning certainty.
