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German 5G auction design could force up spectrum costs: D. Telekom

FILE PHOTO: A 5G sign is seen during the Mobile World Congress in Barcelona, Spain on February 28, 2018. REUTERS/Yves Herman/File Photo

BONN, Germany (Reuters) – The way in which Germany 5G auction is carried out is creating a shortage of spectrum, that the risks to force up the cost and leaving operators short of money to build for the next generation of networks, Deutsche Telekom CEO Tim Hoettges said on Thursday.

“An artificial scarcity of public resources is made, which may push up the price,” Hoettges told the company’s annual general meeting in Bonn, adding: “In the end, there is no money for the build-out.”

The German regulators have carved out a plate of frequency that are suitable for use in high-tech ‘connected’ factories, and will assign, on a regional basis, directly to industrial companies, later this year.

Four operators are now vying for a total of 420 MHz spectrum in the 2 GHz, 3.6 GHz band in an auction that began last week, with a combined bids topping € 1 billion ($1.1 billion) on Wednesday evening.

Analysts expect that the yield on the open auction in which Vodafone, Telefonica Deutschland and new member 1&1 and Drillisch also take part – 3 billion euros or more.

A judge threw out challenges filed by the operators to halt the auction. Litigation is pending that could bring the auction the results of the test with retrospective effect, the industry says.

Hoettges reiterated earlier complaints about delays to win local approvals for the establishment of new telecom masts in Germany, two years or more, and urged the authorities to ease regulation to encourage investment.

He also called for more infrastructure sharing, in which competitors were able to install antennas on the same towers, as a way to the cost of the build 5G networks.

“We build the mast, and others can use to mount their antennas. icularly in rural areas, where the coverage gaps are still large,” he said.

Reporting by Douglas Busvine; Editing by Mark Potter

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