Germany’s mobile spectrum extension will enhance coverage

BNetzA has decided to extend the spectrum usage right in the 800 megahertz (MHz), 1,800 MHz, and 2,600 MHz bands. This decision, which also aims to align the usage rights' durations with later expiring usage rights, comes with various obligations for mobile network operators, namely coverage obligations and negotiation requirements, to drive expansion and promote competition.

By 2030 at least 99.5% of the area nationwide must be covered with at least 50 megabits per second (Mbps), and by 2029 at least 99% of households in thinly populated municipalities in each federal state must be covered with at least 100 Mbps. Additionally, by 2029 all federal roads must be covered with at least 100 Mbps, and all regional roads as well as inland waterways of the federal core network must be covered with at least 50 Mbps. For district roads, the requirement also includes coverage with at least 50 Mbps by 2030.

Dr. Marc Salevic, telecommunications law expert at Pinsent Masons, comments: "The BNetzA aims to strengthen rural areas with its decision. The expectation is that the extension of spectrum will improve mobile coverage in previously underserved areas. The specific coverage requirements for rural areas and the area coverage requirement are intended to promote equivalent standards of living in urban and rural areas."

Another important aspect of the BNetzA decision is the negotiation requirement with service providers and virtual network operators (MVNO). Accordingly, mobile network operators are required to negotiate with service providers and MVNO about the use of spectrum to promote competition.

Dr. Benedikt Beierle, telecommunications law expert at Pinsent Masons, says: "The BNetzA issues the negotiation requirement despite considering competition in both the wholesale and retail markets to be sufficiently effective. Conversely, it can also be said that existing competition does not justify further service provider obligations."

The negotiations are to be conducted in a non-discriminatory and technology-neutral manner. To further specify, the BNetzA has established "guidelines".

"However, the guidelines also predominantly contain vague legal terms," said Dr. Marc Salevic. For example, contract durations should be fair and reasonable, enabling service providers and MVNOs to amortize investments made during the contract term within the regular contract duration.

In addition to the negotiation requirement with service providers and MVNOs, the BNetzA has established a negotiation mandate for the cooperative, joint use of spectrum below 1 gigahertz (GHz) as another measure in favour of 1&1. The three major network operators will have to negotiate the shared use of spectrum below 1 GHz to a certain extent where 1&1 expands its network.

Furthermore, each mobile network operator is obliged under telecommunications and antitrust law to negotiate non-discriminatory cooperation agreements upon request that include the expansion and joint use of infrastructures as well as the joint use of spectrum.