German 5G spectrum auction – back to 4 MNOs?
Live tracker and Rewheel analysis
April 2019

The 5G-centric spectrum auction in Germany, that started in March 2019, may facilitate the entry of a new 4th mobile network operator, 1und1 Drillisch (currently it operates as an MVNO using Telefonica O2’s network). Rewheel was tracking the auction.

The auction ended after 497 rounds on the 12th of June 2019. 1und1 Drillisch secured 50 MHz TDD spectrum in the 3.6 GHz band. 1und1 Drillisch also secured 2x10 MHz FDD spectrum in the 2.1 GHz FDD band, which will be critical to roll out a nationwide network with reliable indoor coverage and support of legacy non-5G terminals. However, the 2.1 GHz blocks that Drillisch secured will be available only from 2026 onwards, so Drillisch’s short-mid-term network rollout and spectrum deployment strategy (possibly a hybrid MVNO/MNO approach) and competitive potential (e.g. to disrupt the German market by offering "Finnish-like" mass affordable truly unlimited mobile data) remain to be seen. Drillisch, which also has the right to rent some Telefonica capacity through 2025, said it had “laid the foundation for a successful and permanent” position as Germany’s fourth operator (Reuters).

One way to look at the outcome of the auction is that Deutsche Telekom, Vodafone and Telefonica, by paying 5.5 billion Euros, successfully prevented the new entrant Drillisch from becoming a truly disruptive new competitive force for another six-seven years (since for that to happen Drillisch would have needed to secure 2 blocks in the short-term available 2.1 GHz FDD band, which it tried till the 183rd round, with a budget of at least 1.24bn).

The chart below puts the prices paid in Germany for the 3.6 GHz band into international context, normalised for bandwidth, population and license duration.
In the table below we summarise the most important numbers (“the big picture”) and Rewheel’s key remarks. Below the table there is a link to a comprehensive MS Excel spreadsheet analysis with benchmark prices of past similar auctions in Europe and beyond.


Last updated 12.06.2019 Round: 497 Sum: 6550 mEURBnetza link

Sum bids (mEUR)Latest roundMaximum
Telekom21752200
Vodafone18801880
TEF DE14251661
1und1 DRI10701435

Number of blocksRound 493Round 494Round 495Round 496Round 497Change in last 5 rounds?Sum bids in Round 497 (mEUR)Ave bid/block (mEUR)Rewheel comment
2.1 GHz I (2x5 MHz FDD)
Telekom44444852213Strategic value for the incumbents to outbid the new entrant aspirant in this lot and prevent them from a meaningful and fast network rollout (see comments below).
Vodafone33333638213same as above
TEF DE11111211211same as above
1und1 DRI0000001und1 DRI would need min. 2 blocks for a credible nation-wide network with reliable indoor coverage (UL/DL decoupling etc) and support of non-5G legacy LTE terminals.
2.1 GHz II (2026-) (2x5 MHz FDD)
Telekom000000
Vodafone11111169169
TEF DE11111170170
1und1 DRI222223351681und1 DRI would need the 2.1 GHz blocks earlier than 2026 (i.e. ASAP), see comment above.
3.6 GHz 10 MHz blocks (1x10 MHz TDD)
Telekom999991323147
Vodafone777771029147
TEF DE67777X1044149
1und1 DRI65555X735147It is likely that 1und1 DRI will settle with 4 or 5 blocks. The critical bottleneck for the market entry is the 2.1 GHz FDD band. Possible 1und1 DRI bidding tactic: push up 3.6 GHz prices in order to deplete the incumbents' overall budget and at the end move for the 2.1 GHz short-term-available blocks.
3.6 GHz Concrete 20 MHz (1x20 MHz TDD)
Telekom000000
Vodafone111114444
TEF DE000000
1und1 DRI000000

Free content
Spreadsheet analysis (xlsx) » Download here


2019
spectrum
5G
Germany
DeutscheTelekom
Vodafone
Telefonica
Drillisch
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