Germany's Monster 4G Auction
10:35 AM -- As German consumers anticipate the new Google (Nasdaq: GOOG) Android-powered device from Samsung Corp. , the country's four mobile operators are preparing to do battle in an upcoming auction for 4G spectrum. (See O2 Snares Samsung Android Deal and Samsung Launches Android Phone.)
German regulator Bundesnetzagentur (BNetzA) plans to auction off around 340 MHz of prime spectrum that can be used for proto-4G technology Long-Term Evolution (LTE).
That's a lot of airwaves. For the German 3G auction of 2000 the regulator offered up 65 MHz of spectrum, for which operators shelled out more than $40 billion.
That eye-watering figure is very unlikely to be reached again in the upcoming German auction, given the current economic environment.
But here's the catch for the 4G auction: The blocks of spectrum are not going to be available in the same frequency bands -- that will challenge mobile operators to first decide which spectrum they want, and then devise their bidding strategies to get it.
And if all four operators are determined to win spectrum in one of the bands, that will likely drive up the bidding prices.
So what's on offer? The German regulator plans to auction spectrum in the 1.8 GHz, 2 GHz, and 2.6 GHz bands, as well as 72 MHz of the so-called digital dividend spectrum in the 790 to 862 MHz frequency band. Digital dividend spectrum is similar to the 700 MHz frequencies auctioned in the U.S. last year and is attractive from a coverage point of view: Better coverage means fewer base stations, which means lower costs (in a nutshell).
The date of the auction has not yet been set, and the regulator will launch a consultation this summer.
Click here for links to the regulator's decisions on how the 1.8 GHz, 2 GHz, and 2.6 GHz bands will be divvied up. For the digital dividend spectrum, the regulator is considering offering blocks of 2x20 MHz or 2x30 MHz, though that hasn't yet been decided.
So with so much spectrum on offer in the upcoming auction, will there be something for everyone? And which is the best spectrum for LTE among that lot -- 800 MHz or 1.8 MHz for coverage and some 2.6 GHz for capacity? The burning question is how much operators are going to pay for it.
Over in Finland, the regulator just handed out additional 1.8 GHz frequencies to three operators Telia Company , Elisa Corp. , and DNA Oy for LTE services, which makes it the first country in Europe to allow operators to use that band for the proto-4G technology. (See Finland Awards 4G Spectrum.)
— Michelle Donegan, European Editor, Unstrung