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After hundreds of rounds of bidding over nearly three months, Germany raised more than expected from its 5G spectrum auction. Auction winners will have to supply households with fast internet and share their networks.
The Federal Network Agency (BNetzA) announced the results on Wednesday after a record 497 rounds of bidding for the 41 blocks of spectrum on offer in the 2 GHz and 3.6 GHz bands that will allow faster data transfers.
5G will be used to upgrade networks so they can run the internet of things with connected factories, cities and autonomous driving.
The €6.5 billion ($7.3 billion) raised is higher than the initial estimates of between €3 billion and €5 billion. The bidding started in mid-March and went up by €2-million increments until BNetzA raised the minimum allowable bid more than sixfold last week. This brought the auction to a close.
The highest bid came from Deutsche Telekom followed by Vodafone and Telefonica Germany (O2). 1&1 Drillisch, a virtual mobile operator controlled by German firm United Internet, also made a successful bid to become a new operator. The Montabaur-based company manages the GMX and Web.de brands.
The bidders complained about the high cost of the auction and warned it could lead to a lack of investment in networks. A member of the Deutsche Telekom board said in a statement that the price could have been lower and that the "spectrum in Germany is more expensive than in other countries."
Increasing all speeds
The terms of the auction require operators to provide high-speed coverage to 98% of households by 2022 and also to share their network with competitors under a "national roaming" clause in the contracts.
The money raised from the auction will be used to upgrade all Germany's broadband networks for improved mobile phone coverage, according to the BNetzA. Germany's wireless networks currently rank only 46th in the world for download speeds.
The amount raised is not a record. In 2000, a 3G auction raised more than €50 billion, which was so high it caused a number of operators to quit the market. The 4G auction in 2015 raised €5.1 billion.
jm/sms (AFP, Reuters, dpa, AP)