German spectrum auction raises more than €5B

German regulator Bundesnetzagentur revealed that bidding in the auction of frequencies for mobile network operators came to an end on Friday, with total bids exceeding €5 billion ($5.65 billion).

After 181 rounds and 16 auction days, bids reached more than €5.08 billion by midday CEST on Friday (June 19) and thus far exceeded the reserve price of €1.5 billion as well as previous predictions of €4.4 billion.

All three participants in the auction were successful in winning spectrum, with Vodafone Germany paying the highest amount of over €2 billion. The winning bids are outlined below:

Telefónica Deutschland
GmbH & Co. OHG

700 MHz:
900 MHz:
1800 MHz:

2 x 10 MHz
2 x 10 MHz
2 x 10 MHz

  €1,198,238,000 

Telekom Deutschland GmbH  

700 MHz:
900 MHz:
1800 MHz:
1500 MHz:

2 x 10 MHz
2 x 15 MHz
2 x 15 MHz
20 MHz

  €1,792,156,000 

Vodafone GmbH

700 MHz:
900 MHz:
1800 MHz:
1500 MHz:

2 x 10 MHz
2 x 10 MHz
2 x 25 MHz
20 MHz

  €2,090,842,000 

The price to be paid by the three operators will no doubt raise some concerns among market analysts, and could be regarded by some as inconsistent with the German policy objective of not maximising auction receipts. When the auction began, Stefan Zehle, CEO of Coleago Consultants, called for moderation in the bidding process and predicted it would raise €2 billion to €2.5 billion.

That early request for moderation appears to have been ignored: bidding seemed to become more frenzied over the past seven days, with bids for paired frequencies in the 700 MHz band more than doubling from the reserve price of around €75 million for each 2x5 MHz block to as much as €171,649 from Deutsche Telekom's domestic unit. Like rivals Vodafone Germany and Telefónica Germany, Deutsche Telekom won two of the six blocks on offer in the 700-MHz band, which is being freed up for use by mobile broadband services.

The highest individual bids were lodged for paired spectrum in the 1.8 GHz frequency band. Vodafone Germany bid the highest amount of €258,247 for block C and won five of the 10 2x5 MHz blocks on offer.

Vodafone also placed the highest bids for four of the eight 1x5 MHz blocks of unpaired 1.5 GHz spectrum, while Telekom bid the most for three of the seven blocks of paired 900 MHz spectrum.

The bidding process began in Mainz, Germany on May 27 with 270 MHz of spectrum from the 700 MHz, 900 MHz, 1500 MHz and 1800 MHz bands up for grabs.

For more:
- see the latest update from Bundesnetzagentur
- see this post from Coleago Consulting from May 29

Related articles:
German spectrum auction bids near €3.5B
German spectrum auction bids pass €2.5B
German spectrum auction bids pass €2B
Germany on starting blocks for 700-MHz spectrum auction
Ofcom opens consultation on revised spectrum licence fee hike

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