DT, Telefónica, Vodafone team up for network rollout in Germany

Deutsche Telekom is to cooperate with Telefónica Deutschland and Vodafone on mobile network expansion in areas of Germany where coverage is limited, such as rural areas and along road, rail and inland waterway transport routes.

November 11, 2019

4 Min Read

BONN -- Deutsche Telekom, Telefónica Deutschland, and Vodafone intend to collaborate closely in the future with the aim of expanding their mobile communications networks to achieve the best possible mobile broadband coverage for customers throughout Germany, especially in rural areas and along road, rail and inland waterway transport routes – a condition that the operators are required to fulfill, as stipulated in the spectrum auction. To achieve this, the three telecommunications providers plan to coordinate the set-up and operation of up to 6,000 new cell sites and have signed a letter of intent to this effect. 1&1 Drillisch AG has been invited to participate in this network expansion collaboration. A prerequisite for joining the collaboration is that the operator must be willing to take on an equal share of the expansion projects as the other parties.

In contrast to working independently, joining forces to provide the relevant technical infrastructure and to construct and operate additional mobile masts and towers saves a significant amount of time and money. The plan proposes that each company participating in the collaboration should set up an equal number of new sites which can then be used by the collaboration partners and fitted with their own antennas and the appropriate network technology as required.

Following a total investment of around 6.5 billion euros for the auction of the new spectrum licenses in summer 2019, the agreed cooperation serves to largely close white spots in sparsely populated regions and along traffic routes in an economically viable way. The coverage requirements imposed by the Federal Network Agency (BNetzA) at the spectrum auction in 2019 call for investments worth billions of euros. The three mobile operators continue to express the view that the conditions imposed upon them are excessive and do not comply with applicable legislation. Moreover, the actual situation shows that an increasing number of citizens’ initiatives and bureaucratic hurdles often slow down the expansion of networks where, in some cases, it is needed most.

The Federal Cartel Office has been informed about the collaboration plans. The Federal Network Agency has already made it clear in the past that, in principle, it considers the joint use of infrastructure to be meaningful. Additional details of the collaboration should be formally agreed at the latest by spring 2020. Accordingly, planning activities for the joint network expansion could then begin soon.

Milestone for network expansion
"The planned collaboration is a milestone for network expansion in Germany”, states Telekom Deutschland’s Managing Director Dirk Wössner and adds, “Our common goal is to eliminate coverage gaps in the mobile network as soon as possible. Sharing infrastructure is nothing new for us. Sharing it at this scale, however, is a major step in the right direction. After all, high-speed internet and excellent voice quality on road, rail and water are vital for an industrial country like Germany that relies on mobile communications”.

“Mobile communications will be the most important technology in the coming decade. And we are pooling our resources to put Germany in an ideal position”, says Markus Haas, CEO of Telefónica Deutschland, and elaborates, “This collaboration is an outstanding example of intelligent cooperation towards taking the next logical step. We must join forces if we are to consolidate Germany’s position as a leading business location that is ready to take on future challenges. Together, we will take digital transformation in Germany to the next level”.

“Today, we are forging an alliance to combat dead spots and increase mobile communications coverage even in areas where it is not profitable”, explains Vodafone Deutschland CEO Hannes Ametsreiter, adding, “In future, hundreds of thousands will benefit from this – people in small rural communities, people on roads, people traveling by train. Together, we operators will construct and share a common infrastructure in dead spots – and of course continue to be rivals in a competitive infrastructure market in the rest of the country. This is good for the network, good for customers and good for Germany’s digital future”.

Coverage of transport routes was a requirement that was imposed upon the operators in the scope of the spectrum auction. The planned agreement enables the network operators to offer their customers the maximum possible coverage along the transport routes. Opportunities for further expansion should also be available through relevant government aid allocated for eliminating specific coverage gaps. The network operators are also willing to work together in this setting.

Deutsche Telekom AG (NYSE: DT)

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