Article by CEO Markus Haas:

We need a mobile communications pact for the digital future of Germany

Credits: Telefónica Deutschland
Markus Haas
The future government has included it in the coalition agreement and we firmly believe it as well: Germany needs a significant impulse for broadband expansion. We also need an overall strategy for mobile communications in order to be leaders in the new 5G technology and ensure the sustainability of Germany as an economic centre. An expensive frequency auction with additional economically disproportionate expenses contradicts this goal. In order for us to close the gaps in Germany’s mobile communications networks and become a leading 5G market, we need mostly one thing: a "mobile communications pact for Germany." I have suggested this today to the Federal Network Agency advisory board responsible for the allocation of mobile communication frequencies. Germany is lagging internationally with regard to fast broadband. For an economic nation like ours, this is an unsustainable situation, which the political world has now also put at the top of its agenda. The experience of the past few years has shown, however, that the previous political and regulatory decisions did not lead to the desired network expansion. Germany still ranks in the bottom quarter for mobile broadband provision. The reason for this is explained in various studies, such as an analysis from the GSMA: the higher the frequency costs in a country, the poorer the network quality. In Germany, over the past 20 years, mobile network operators had to spend 60 billion euros for the acquisition of frequency usage rights alone. That amount would have easily financed an almost nationwide expansion of high-speed networks. However, the money given by the network operators to the state never reached that area.

The French model as an example for the German mobile communications pact

In light of the necessary digitalisation of the economy, with regard to Germany’s broadband policy, things simply cannot stay as they are. We have to rethink frequency policy. Our French neighbours are currently showing us how frequency rights for extensive broadband mobile communications coverage can be provided in an investment-friendly manner. In mid-January, the mobile network operators voluntarily committed to a significantly extended expansion programme. In exchange, the French government will arrange the obligations for frequency acquisitions and the frequency costs in such a way that network operators can invest the money saved in infrastructure. Such a model could be adapted to the German market. For instance, by extending part of the usage rights currently allocated in the 2 and 3.6 GHz ranges instead of auctioning them off. The Federal Network Agency, relevant politicians and we network operators should sit down at a table and develop a strategy together for this – as provided for in the coalition agreement. In so doing, we have to resolve the conflicts between the further expansion of mobile broadband networks, the so far horrendous frequency costs, the – in some cases – required market-power-independent access for service providers that do not themselves invest in network expansion, and the planned simplified access to the regional 3.6 GHz spectrum. The question of national roaming to close the gaps should also be part of the discussion within such a mobile communications pact. After all, one thing is clear: high frequency costs, stricter expansion requirements and a further opening of network access for non-investing service providers lead, in the end, to insurmountable investment barriers instead of the necessary impulses.

Frequency allocation should not be rushed

It is important, in this context, that process quality comes before speed. The range subject to the upcoming allocation will mostly only be available in 2021 or later in any case. Additionally, the hardware required for 5G transmitting equipment will only be launched in a mass-market-compatible manner as of 2020. A frequency provision in 2019 would therefore be sufficient and give all those involved the chance to find the best solution for the digital future of Germany. We would like to make a contribution – however, it will be difficult to do so for the benefit of the people of this country with a political "Carry on!"