National Roaming:Telefónica Deutschland establishes long-term national roaming partnership with 1&1 Drillisch

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Credits: Telefónica Deutschland
1&1 Drillisch and Telefónica Deutschland: Long-term partnership by converting the current MBA MVNO contract into a National Roaming Agreement (NRA)
Today, 1&1 Drillisch has bindingly accepted Telefónica Deutschland's National Roaming offer dated 5 February 2021. The companies are extending their long-term partnership by converting the current MBA MVNO contract into a National Roaming Agreement (NRA) under the remedy framework from the Telefónica Deutschland and E-Plus merger in 2014. Now, the parties are aiming to finalise the contractual details of the NRA by mid-May 2021. The NRA underpins the strategic goals of both parties with Telefónica Deutschland gaining increased visibility with regards to its financial and network planning while 1&1 Drillisch can approach its own network rollout. The NRA has an initial contract period of 5 years, retroactively starting 1 July 2020, and may be extended twice. First, 1&1 Drillisch has an option to extend until mid-2029. For the period thereafter, a further extension for up to 5 years is possible. For the initial contract period, the commercial terms are defined assuming significant mobile traffic growth in Telefónica Deutschland's network.

National roaming services include available 2G/3G/4G coverage
National roaming services include available 2G/3G/4G coverage while MBA MVNO services continue to include Telefónica Deutschland's available 2G/3G/4G/5G coverage. After a defined transition period to migrate existing customers to its own 5G network, 1&1 Drillisch relies on its own 5G coverage. Until completion of 1&1 Drillisch's customer migration, national roaming and MBA MVNO services run in parallel. The commercial terms of the NRA apply to both services. As defined in the merger remedies, the NRA pricing structures are derived from the MBA MVNO contract. These are in principle a combination of per unit prices and pre-determined while over the course of the contract adjustable volumes. Hence, Telefónica Deutschland is securing valuable long-term revenue streams while 1&1 Drillisch is gaining flexibility during its network roll-out phase. A price review mechanism can be initiated once a year. Telefónica Deutschland and 1&1 Drillisch have agreed confidentiality with regards to further details of the NRA.

Telefónica Deutschland does not expect any negative retrospective impact from the NRA on financial results for fiscal year 2020. Telefónica Deutschland's financial planning and the medium-term outlook remain unaffected.