Telefónica plans 4G sharing with DT, Vodafone for coverage gaps in Germany

Germany
Telefónica's grey-spot sharing agreements with Vodafone and DT cover 1,200 sites. (Getty Images)

Telefónica Deutschland signed respective agreements with Vodafone and Deutsche Telekom for active network sharing across several hundreds of sites to deliver 4G coverage to customers Germany in areas where only one provider has service.

The German operators had already teamed up in 2019 to build out coverage in unserved “white spot” areas with an infrastructure sharing agreement for roughly 6,000 new sites. Tuesday’s announcement involves a different sharing set-up, where the partners grant each other mutual network access at certain locations where the other doesn’t have infrastructure. At those sites, 4G LTE service will be offered in the 800 MHz band.

Telefónica’s separate letters of intent with Vodafone and DT cover so-called “grey spots” – places that don’t completely lack 4G coverage, but where only one of the two parties offer mobile. They are focused on sparsely trafficked locations, away from major transit routes and outside residential areas.

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With the 2019 infrastructure deal, each company was to set up an equal number of new cell sites that could then be used by the other partners and fitted with their own antennas and network technologies. Unlike the “white spots” or other site sharing deals, the new Telefónica (which operates as O2 in Germany) partnerships don’t need separate radio technologies or additional antennas installed.

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In a Tuesday note to investors, New Street Research analysts noted the grey-spot sharing agreements with Vodafone and DT cover 1,200 sites “which will help to support O2D’s network coverage, albeit this still falls short of the 4,000 grey spot sharing deal already announced last year between DT and Vodafone.”

In addition to filling coverage gaps, part of the motivation is cost. Deutsche Telekom cited the financial challenges of building and operating individual infrastructure using their own technology in these low-density areas.

“Joint projects like this are becoming increasingly important to network build-out – in both broadband and mobile communication. Together with Telefónica / o2 we can make an important contribution to providing better, uninterrupted LTE coverage in Germany,” said Srini Gopalan, managing director of Telekom Deutschland, in a statement. “We're teaming up with our competition to ensure that even more people in Germany can use a better network. This agreement further attests to our conviction that digitalizing Germany works best through cooperation.”

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European operators like Telefónica, DT and Vodafone have been quicker than U.S. carriers to show interest and sign on to active network sharing deals as a way to bring down costs of building out and expanding coverage.

The German mobile operators had voiced issues previously over impacts of coverage requirements imposed by regulators in connection with Germany’s 5G spectrum auction.  

"We are creating even more network with fewer masts: cooperations like these strengthen Germany's infrastructure – and bring reception even to places where it previously left much to be desired. All of this shows that whether in white or grey spots, network operators are moving closer together through fair partnerships for an even better network experience for all of their customers," said Vodafone Germany CEO Hannes Ametsreiter in a statement.