August 24, 2018 / 11:52 AM / in 3 months

Germany needs fourth mobile operator: antitrust chief

FRANKFURT (Reuters) - Germany’s antitrust regulator called on Friday for a fourth mobile operator to enter the market when 5G licences are auctioned next year, rebutting arguments from the Big Three established players that more competition would hit investment.

The intervention by cartel office chief Andreas Mundt underscored concerns that market concentration has left Europe’s largest economy lagging its rivals in the race to build connected factories or put self-driving cars on the road.

His views, however, appeared to be at least partly at odds with those of the Federal Network Regulator (BNetzA), which is due to announce key terms for the 5G auction next month, and the German government, which is keen to maximise auction proceeds.

“It would be desirable for competition on the mobile market if the auction enabled the entry of a fourth network operator,” Mundt said in a statement.

The three existing operators - Deutsche Telekom, Vodafone and Telefonica Deutschland - have pushed back against calls for auction terms that would lower barriers to entry.

Mundt also called for network operators to open up their networks on a fair and non-discriminatory basis to third parties such as service providers and virtual mobile network operators (MVNOs).

The network regulator plans in early 2019 to auction 2 Gigahertz and 3.6 Gigahertz frequencies that would be suited to helping power digital industrial supply chains in which sensors and robots are able to ‘talk’ to each other.

Deutsche Telekom, Vodafone and Telefonica Deutschland argue that an auction bidding war would leave them with less money to invest in their networks. Allowing network access to rivals who don’t have to shoulder the same financial burden would put them at a further disadvantage, they say.

United Internet, whose 1&1 unit is an MVNO specialist, has flirted with the idea of bidding in the 5G auction.

For that to be viable, United Internet’s CEO Ralph Dommermuth says it would be vital for the BNetzA to allow so-called national roaming - allowing a new entrant to rent network access where it lacks coverage.

In talking points provided to German lawmakers, the BNetzA has however cautioned that any obligation to share infrastructure or provide national roaming would only be justified if a network operator has a dominant market position.

Deutsche Telekom argues that, with a mobile market share of just over 30 percent, it can no longer be considered to be a dominant player. The company, partly privatised more than 20 years ago, is still partly state owned.

The BNetzA’s advisory board, made up of lawmakers from both houses of parliament, meets on Sept. 24 to discuss plans for the 5G auction. Terms are due to be finalised in November.

Reporting by Douglas Busvine; Editing by Maria Sheahan and Susan Fenton

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