German Spectrum Auction: Day 21

8:35 AM -- As the big German spectrum auction heads into week five, the bidding has just passed the €3 billion (US$3.9 billion) mark after 161 rounds.

Total bids so far on Monday morning came to €3.09 billion ($4.02 billion), and the bidding is still going on among the four participating German operators -- E-Plus Mobilfunk GmbH , Deutsche Telekom AG (NYSE: DT), Telefónica O2 Germany GmbH & Co. OHG , and Vodafone Germany .

The 800MHz frequency band has attracted the highest amount of bids at about €2.6 billion ($3.4 billion). While this spectrum is perceived as the most valuable for Long Term Evolution (LTE), it also has some special strings attached for coverage obligations. Operators that acquire spectrum in the 800MHz band will have to roll out mobile broadband networks in rural areas in Germany that have poor broadband access. The license obligations require operators to cover 90 percent of these areas before they can roll out mobile broadband in other areas using this spectrum, according to a Bundesnetzagentur (BNetzA) spokesman.

The latest auction results are posted here.

— Michelle Donegan, European Editor, Light Reading Mobile

shygye75 12/5/2012 | 4:36:50 PM
re: German Spectrum Auction: Day 21 I guess no one is being scared off by the prospect of having to take on some loss leader buildouts to get the big spectrum prize. But at some point the winning bidders will need to deal with that reality.
Michelle Donegan 12/5/2012 | 4:36:50 PM
re: German Spectrum Auction: Day 21

Those are definitely numbers I would like to know, and I'll ask around. 

Also, I don't think the government is offering any help with funding for this rural broadband project. 

Not all of the license owners in 800MHz will have to meet the 90% coverage obligation in the rural areas - so there won't be four different LTE networks built out to cover a small village. Just one operator needs to meet the obligation in each designated region, as I understand it. 

shygye75 12/5/2012 | 4:36:50 PM
re: German Spectrum Auction: Day 21 Hi, Michelle -- Are there any estimates on how much it will cost operators to meet the baseline obligations for the underserved markets?
Gabriel Brown 12/5/2012 | 4:36:38 PM
re: German Spectrum Auction: Day 21

Whichever operator gets a decent chunk of 800 MHz will have such an embedded advantage over the long-term that it has to push the price up. 

There are four operators in Germany and only three lots of 2x10 MHz spectrum. I'd guess E-Plus will opt-out first.


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