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Court Could Halt German LTE Auction

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
3/10/2010
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A regional administrative court in Germany could halt the proceedings of the mobile broadband spectrum auction that's due to start in April, a move that would delay operators' plans for deploying Long Term Evolution (LTE) networks.

At a hearing on Wednesday March 17, the administrative court of Cologne will review the lawsuits filed by E-Plus Mobilfunk GmbH and Telefónica O2 Germany GmbH & Co. OHG against the regulator Bundesnetzagentur (BNetzA) , as well as their application for a court order to suspend the spectrum auction. The court in Cologne has the power to stop the auction. (See Lawsuits Threaten German LTE Auction.)

In November 2009, E-Plus and O2 took the German regulator to court because they claimed the way the auction, the country's largest, is structured is anti-competitive and gives an advantage to larger operators T-Mobile Deutschland GmbH and Vodafone Germany . (See Germany's Monster 4G Auction.)

Separately, the operators have applied to the court for a provisional court order to suspend the auction, which is also scheduled to be reviewed at the hearing on March 17.

The decision is important because the airwaves to be auctioned include spectrum (across a number of frequency bands) that could be used for LTE services.

The likelihood of the Cologne court actually halting the German auction is not clear. A spokesman for the German court, who could not comment on a likely outcome, said there's no real precedent because this is only the second spectrum auction in Germany. Industry sources say the verdict could go either way.

Because the decision could go either way, all the participants are preparing as if the auction will definitely take place as planned on April 12. The regulator has approved four bidders: E-Plus, Telefónica O2 Germany, T-Mobile Deutschland, and Vodafone Germany. (See 4 Bidders in German LTE Auction.)

The German auction is a big deal. Deutsche Telekom AG (NYSE: DT)'s CTO Olivier Baujard described it as "the event of the decade," in a recent interview with Light Reading Mobile. "With so much spectrum coming on to the market, it will shape the market for very long," he said.

The regulator will auction a total of 340MHz of spectrum in the following frequency bands: 1.8MHz, 2GHz, 2.6GHz, and 800MHz. It's the 800MHz band -- the so-called "digital dividend" spectrum between 790MHz and 862MHz -- that is considered the prime beachfront frequency in this auction. The 800MHz band is attractive because it has better coverage characteristics: Better coverage means fewer base stations, which means lower equipment costs for operators.

E-Plus and O2 are unhappy with the regulator as they feel the auction's rules will likely result in T-Mobile and Vodafone controlling the majority of the highly sought-after sub-1GHz spectrum: Both T-Mobile and Vodafone already have some 900MHz spectrum as part of their existing GSM licenses. (See Europe Faces 4G Spectrum Delays and Europe Waits for 4G Spectrum.)

— Michelle Donegan, European Editor, Light Reading Mobile

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