Not on the same wavelength Lawsuits overshadow Germany’s upcoming 5G auction

Cellphone service firms 1&1 and Freenet have taken legal action against the rules governing the next auction of mobile frequencies, following the lead of top network operators Telekom, Vodafone and Telefónica.
Quelle: Reuters
Also the number of telecoms companies suing the government.

Discount mobile phone service providers 1&1 and Freenet have joined the big three network operators Telekom, Vodafone and Telefónica in filing lawsuits against the German government over the rules governing the upcoming rollout of 5G services in Germany.

“It’s directed against the overall terms and keeps all legal options open,” a spokesman for 1&1 told Handelsblatt. A spokesman for Freenet said its lawsuit was aimed at establishing greater legal certainty in the auction process.

The government has scheduled the auction for 5G licenses for the first quarter of 2019 and expects it to raise as much as €5 billion ($5.7 billion). The legal proceedings have fueled speculation that the auction might be delayed.

Telekom, Vodafone and Telefónica have already filed suits. “We have said from the start: In our view the conditions set for the auction are unrealistic and create legal uncertainty,” said a Telekom spokesman. He said the Federal Network Agency was imposing excessive obligations on telecoms firms in the 5G launch. The terms include requiring firms to provide high-speed network coverage along motorways and major highways.

No more competitors, thanks

The lawsuits come after the German government, which has pledged to plug gaps in mobile phone service in rural areas as part of its program to speed up the sluggish pace of digital change in Europe’s largest economy, told the Federal Network Agency to tighten conditions for awarding the 5G frequencies.

The Federal Network Agency declined to comment on the lawsuits. “We have always pointed out in the discussion about the auction rules that the decision can be reviewed in court. We are not commenting on the current proceedings,” a spokesman for the agency said.

Phone companies have said the auction rules would force them to share frequencies and infrastructure and would lower the threshold for a fourth player to enter the German mobile telecoms market when 5G is launched. 

The founder of 1&1’s parent company United Internet, Ralph Dommermuth, has said he might consider setting up a fourth phone network in Germany provided a national roaming system were put in place requiring other operators to share their networks.

A spokesman for 1&1 said the company would decide in the second half of January whether to take part in the auction. Firms have until January 25 to register their participation.

Stephan Scheuer is co-head of Handelsblatt's feature and people's desk. He was previously China correspondent. To contact the author: [email protected]