CEO Markus Haas talks to the Welt am Sonntag:
Full area coverage is not feasible with the new spectrum
At an after-work talk, CEO Markus Haas spoke to the German newspaper Welt am Sonntag about spending his leisure time in the mountains and why there is currently such a heated debate about current and future mobile network coverage in Germany. We provide an abridged version of the interview here. The original appeared in the Welt am Sonntag on 16 September. […]
At least you have some peace and quiet up here as a manager. Often mobile phones don’t work at all in the mountains. Does that bother you? Haas: In this particular area we managed to close the dead zones pretty well. When I’m here I check my smartphone perhaps twice a day, not more. And it’s on silent. But it’s true, every now and then you get no reception at all in the mountains. When will all the dead zones in Germany be eliminated? Haas: We probably won’t be able to achieve 100 percent area coverage in Germany. But in terms of population coverage we’ll get very close. […] Is the next mobile generation 5G a chance to finally achieve full area coverage? Haas: With the right frequencies it could work. But the frequencies that are due to be auctioned off next year are not suitable because their range is too small. If we want to cover the entire surface area of Germany, we will need even more spectrum in the coming years. But the foundations have to be laid first. What foundations? Haas: First of all the long-wave frequencies – that’s below 700 megahertz – need to harmonised worldwide and designated for the corresponding use. The World Radio Conference next year, where every country will be represented, will be the key to this. If this conference is not a success, we will not have comprehensive 5G coverage in the next ten years.
The Federal Network Agency has announced its agenda for next year’s auction of new frequencies. It has been quite accommodating towards the network operators and is making it harder for a newcomer and a fourth mobile network to enter the market. Haas: That was an intense summer with plenty of discussions. The smoke from the cannons is slowly clearing. We recognise that the people pressure on the government to finally solve the problem of network coverage is hefty. That’s reflected in the Network Agency’s plan. Top priority goes to the network coverage and incentives to invest. And it’s not just the network operators who want this – other industries are also calling for it, including the car makers, engineers and the logistics sector. Why would a fourth mobile network be so bad? Haas: At the UMTS mobile auction nearly 20 years ago, we had less of an obligation to expand – just 50 percent. Because of this there were six successful bidders for the frequencies, who transferred a great deal of money to the government. But there weren’t six networks built. Three of them didn’t even survive in the end. Today as well, the need for investment in Germany is so great that it won’t be cost-effective for four networks. A fourth network would only ever be a subnetwork, which wouldn’t help Germany with its network coverage. If the priority is to want the best networks, then the issue of a fourth network operator is irrelevant. The Network Agency has taken your arguments into account. You must feel like celebrating. Haas: I didn’t crack open the bubbly! The commitments proposed there are pretty demanding on us. We have to build another several thousand transmitters. With the spectrum to be auctioned off, the expansion plans are not viable in terms of surface area. Which is why the lifespan of existing frequencies needs to be extended. Also the obligation to allow other companies to access our network is still there. It’s just worded in a somewhat roundabout way. This still needs to be clarified in order to prompt the desired expansion push for the industry. We also haven’t read anything yet about the fair payment conditions for auctioned frequencies promised by the government. At the extreme we would have to pay for the licences seven years before they are used. That’s more than questionable and is asking for trouble. […]
So when will the first users be on the 5G network? Haas: That depends on when the first devices are available for the mass market. I don’t think it will be before 2020. What will my first 5G smartphone be able to do better than my current device? Haas: Perhaps you’ll notice that the data transfer is a bit quicker and the network reacts faster to your input. But the strength of 5G won’t be shown in smartphones. 4G is already very good there and will be able to serve the everyday needs of consumers for years. 5G will make itself felt when very large quantities of data have to be managed in the network, and with industrial applications. For us, 5G means first and foremost a noticeably more efficient network, which we certainly need if the volumes of data in the network keep on increasing the way they have. […] Telefónica is the only network operator in Germany that doesn’t have a fixed network. Will this be a drawback in the 5G future? Haas: We offer our customers a first-class range of fixed network products based on Deutsche Telekom’s technology. We connect our mobile transmitters, on the other hand, through fibre-optic partnerships. The prices there are in free fall. You don’t have to own the fibre optics. However, we don’t have our own direct broadband access to the customers in their homes. We will shortly be testing whether, at least in the big cities, we could bridge that distance with 5G.