* Telekom to invest savings in network
* Pact helps Telefonica address infrastructure shortfall
* Germany plans 5G licensing round in early 2019
FRANKFURT, Oct 8 (Reuters) - Deutsche Telekom and Telefonica Deutschland said they would expand their network cooperation ahead of Germany’s 5G licensing round, with Telekom connecting up to 5,000 of Telefonica’s base stations to its fibre-optic network.
The partnership will save money for market leader Telekom which it can invest in upgrading its network while helping No.3 player Telefonica get its mobile infrastructure 5G-ready, the companies said.
“We will invest the resources that we save in further building out our network infrastructure and in the development of 5G,” Telekom CEO Dirk Woessner said in a statement on Monday.
The alliance comes as Germany finalises terms for its first auctions of 5G spectrum in early 2019, frequencies that would support uses such as connected factories.
Established operators are concerned that potentially onerous auction terms, and calls by some lawmakers and regulators for terms conducive to the entrance of a fourth operator, could hurt their ability to invest.
Germany’s federal network regulator has also left open the possibility of various forms of cooperation on 5G networks between operators to ensure that coverage across Germany can be as broad as possible.
Telefonica has a mobile-led strategy, leaving it at a relative disadvantage to Telekom and No.2 player Vodafone in providing 5G services.
These require extensive fibre-optic networks to ensure the high data speeds and low latency needed for applications like self-driving cars.
“By using the available infrastructure, we can accelerate the expansion of our mobile network and get a significant portion of our mobile base stations in shape for the future 5G standard,” said Telefonica CEO Markus Haas. (Reporting by Douglas Busvine; editing by Jason Neely)