The fledgling operator 1&1 has been beset by deployment challenges. Access to low-band spectrum could be vital to meeting its longer-term coverage obligations
New mobile entrant could be fined €50,000 per missing base station: BNetzA, the German regulator, has reportedly opened a fine proceeding against 1&1 for failing to meet its 5G base station deployment target. 1&1 currently leases capacity from both O2 and Vodafone to operate as a MVNO, but it acquired 2GHz and 3.6GHz spectrum in the 2019 auction (as did the three incumbent telcos), which would enable it to become the country’s new fourth mobile network operator. Under the auction rules, 1&1 was required to deploy 1,000 5G sites by the end of 2022; however, it only managed to roll out five in that time. While it is unclear how large the expected fine could be, documentation from BNetzA suggests it could be as high as €50,000 (£43,500) per missing base station.
Vantage Towers blamed for rollout delays: Since acquiring its 5G licence, 1&1 has been selecting infrastructure partners for the construction of its network, agreeing a deal with Rakuten in 2021 to build ‘Europe’s first fully virtualised mobile network’ based on open RAN technology. However, it’s the long-term tower rental agreement signed with Vantage Towers (the primary “expansion partner”) that has allegedly been the source of technical problems experienced by 1&1 and, in turn, the reason for delays to its rollout plan. In February 2023, the operator filed a complaint with the competition authority (the Bundeskartellamt) about the behaviour of Vodafone and its subsidiary Vantage Towers, claiming that the towerco had failed to keep to delivery agreements on several occasions and that it has demonstrated a clear preference for supporting the rollout activities of Vodafone over that of 1&1.
Deutsche Telekom contests 1&1’s eligibility for future spectrum auction: 1&1 has faced legal action by Deutsche Telekom over the advertising of its mobile network as being ‘Europe’s most advanced’ and seen its calls for 5G national roaming rejected by rivals. Tim Höttges (CEO, Deutsche Telekom) has also claimed that the challenger should not be eligible to participate in Germany’s next spectrum auction due to the limited coverage achieved to date. That award will determine future usage rights for the 800MHz, 1800MHz and 2.6GHz bands, which expire at the end of 2025. As things stand, BNetzA is proposing a spectrum swap "to accommodate the interests of all market participants" and ensure new entrants can access sub-1GHz spectrum. While 1&1 is now offering 5G FWA services and remains confident of launching mobile 5G services in Q3 of this year, acquiring low-band spectrum could prove crucial to meeting its licence obligation for 50% population coverage by the end of 2030.
