Tuesday, June 18, 2019
Home Tech 5G auction brings 6.6 billion euros: Drillisch mixes more in the future

5G auction brings 6.6 billion euros: Drillisch mixes more in the future

After the end of Germany's longest mobile phone auction experts and politicians expect positive consequences for consumers. These were ultimately a winner of the auction. Finally, there will be more competition on the market in the future due to the entry of Drillisch as the fourth German network operator. "The fourth network operator in the market, the competition will be exacerbated what the consumer can benefit, such as if mobile phone contracts are offered cheaper because of the competition than before," said the VWL Professor Vitali Gretschko of the think tank ZEW.

After more than 12 weeks on Wednesday, the auction of mobile frequencies had come to an end. The German Telekom, Vodafone, Telefónica and Drillisch pay a total of nearly 6.6 billion euros. New entrant as a network operator is Drillisch – in the future, there will be radio masts of four and not just three companies in Germany.

"Good news for consumers"

"Drillisch could provide the German market with modern, customer-oriented pricing models new impulses – good news for consumers," says Jens-Uwe Theumer Verivox price comparison portal. The FDP member of parliament Frank Sitta also evaluated the outcome of the auction positively: "It is very gratifying that there will be another mobile operator, because more competition leads to lower prices and a better infrastructure for consumers."

The German Association of Consumer Organizations (vzbv) also welcomed that Drillisch will be joined by another network operator. "Because competition stimulates business and ensures favorable prices," said vzbv boss Klaus Müller of the "Rheinische Post". "In order for the new provider to become truly competitive, the three incumbent network operators must make a fair offer for the use of the rural networks."

Is the money now missing for network expansion?

There are critical tones with regard to the state revenue. In the run-up to the auction, experts had only assumed revenues of three to five billion euros, and now, at almost 6.6 billion euros, they are even more. But this leaves a "bland connotation", because the billions were missing the mobile market now to expand the network, complained FDP politician Sitta.

The Green Bundestag member Oliver Krischer also criticized: "The revenues from the auction are much too high – which leads to a slower expansion of mobile communications." With the money, the federal government should now launch a funding program in the mobile network expansion in rural areas, "otherwise Germany remains a funk-hole nation," demanded the Green Party.

So far, it is planned that the proceeds will flow into a special fund of the federal government called "digital infrastructure". With 70 percent of it, the fixed-network broadband expansion should be promoted, with 30 percent better Internet and new technology to be paid in schools.

The abbreviation 5G stands for the 5th mobile generation. The standard is the successor of 4G, also called LTE. 5G is much faster to download and has less latency – data is processed in real time.

Telekom secures most of the blocks

And who won the auction? The auction theorist Gretschko evaluates the outcome as a small setback for Drillisch and justified this with the fact that the company was outbid in the end and thus got a block less than in the weeks of striving sought. In the opinion of Gretschko, Deutsche Telekom and Vodafone performed well. "They got exactly what they wanted." However, they also have to reach far deeper into the bag than expected. Telefónica gave Gretschko a moderate testimony.

Of the 41 frequency blocks most account for the German Telekom – the former state monopolist was able to clear 13 blocks and must pay for it 2.17 billion euros. Vodafone accounts for 12 blocks for 1.88 billion euros and Telefónica 9 for 1.42 billion euros. Drillisch was able to secure 7 blocks for 1.07 billion euros – the subsidiary of the Rhineland-Palatinate group United Internet has so far no own network, instead it uses antennas of the competition.

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