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

IPobserver 12/5/2012 | 4:05:53 PM
re: Germany's Monster 4G Auction

This is huge. Exciting, challenging, times for technology strategists in German mobile operators.

mobileinsider 12/5/2012 | 4:05:53 PM
re: Germany's Monster 4G Auction

Spectrum is needed but by 'when' is the big question. Just because LTE starts early deployments, does not mean spectrum is needed for another 3-4 years. Then again (countering my own comment), it takes anywhere from 3-4 years from the time spectrum is awarded to actual use of the spectrum takes place (spectrum analysis, field test, equipment, devices, etc).

We should not expect to see LTE deployed across the entire spectrum in a country (700MHz, 800MHz, 2.6GHz) but in hotspots where capacity and coverage requirements are the highest. Using 700 to 900MHz spectrum  is great for HSPA coverage.  LTE is likely deployed as hotspot islands in dense areas.

Devices and equipment availability will stipulate when LTE actually gets deployed. Interestingly enough, China Mobile is asking for FDD-TDD solutions for LTE . Qualcomm may have to support a variety of bands on their coming chip roadmap and toss in TDD and FDD support, and the timeline change. The big question is, will Vodafone and T-Mobile ask for the same (As China Mobile) and by when? Some thoughts on NGN/LTE posted at http://tinyurl.com/ctw83x


IPobserver 12/5/2012 | 4:05:48 PM
re: Germany's Monster 4G Auction

I think it really depends on the timeframe you're talking about. Plus, different operators in different markets have different views on how to rollout LTE.

I'm hearing far less enthusiam for 3G/HSPA at 900 MHz these days. When that gets refarmed it will lilkey be LTE in most markets.

The 800 MHz digital dividend band in Europe could well come with coverage conditions that means operators will have to rollout LTE beyond the cities.


IPobserver 12/5/2012 | 4:05:48 PM
re: Germany's Monster 4G Auction

To add, the way this auction is set up means operators have to plan for long-term (10 years +) as they develop bidding strategies.

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