German spectrum auction bids near €3.5B

German regulator Bundesnetzagentur revealed that bids in the country's auction of frequencies for mobile network operators are nearing €3.5 billion ($3.9 billion) so far, easily beating the reserve price placed on the sale.

After 129 rounds, bids reached over €3.47 billion by midday CEST on Friday (June 12) and thus exceeded the reserve price of €1.5 billion. The highest individual bids were lodged for paired spectrum in the 1.8 GHz frequency band, with Deutsche Telekom's domestic unit bidding €197.94 million for 2x5 MHz in block G.

Bids for paired frequencies in the 700 MHz band, which are being freed up for use by mobile broadband services, have remained fairly consistent throughout the bidding process at around €75 million for 2x5 MHz blocks.

The bidding process began in Mainz, Germany on May 27 and is expected to last for several weeks. Telefónica Germany, Deutsche Telekom and Vodafone Germany are all taking part in the bidding process, with 270 MHz of spectrum from the 700 MHz, 900 MHz, 1500 MHz and 1800 MHz bands up for grabs.

Bloomberg previously reported that the final bidding amount is expected to come close to the €4.4 billion raised in the last auction in 2010, according to analysts at Warburg Research.

Bundesnetzagentur has noted that the switch to DVB T2 by television broadcasters means that 2x30 MHz of spectrum in the 700 MHz band can gradually be used for mobile broadband starting in 2017. The 900 MHz and 1800 MHz bands are also being auctioned as their usage rights expire at the end of 2016.

The reallocation of 700 MHz frequencies is designed to help achieve the German government's broadband objectives. Auction assignees have to commit to providing broadband coverage to at least 97 per cent of households in each federal state and at least 98 per cent of households nationwide, with a minimum transmission rate of 50 Mbps per sector and an average of 10 Mbps per household.

Mobile broadband coverage is also to be guaranteed along national motorways and high-speed railway lines. These requirements will apply to existing network operators only and not to new entrants, the regulator added.

Elsewhere in Europe, France has said it would allocate frequencies in the 700 MHz band to telecoms operators in 2015 and UK regulator Ofcom said last year it would assign 700 MHz frequencies to mobile operators by 2022.

For more:
- see the latest update from Bundesnetzagentur

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