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German mobile pacts unlikely, unwelcome

Consolidation in the German mobile segment wouldn't be welcome and isn't more likely after the conclusion of the recent spectrum auction in the country, according to the regulator.

"All mobile network providers have been able to double their spectrum, hence I consider a consolidation process unlikely," said Matthias Kurth, president of Bundesnetzagentur, the country's network regulator.

In any event, the regulator wouldn't welcome the prospect of fewer mobile providers as the German market, which has the most customers of any European country, is "balanced," Kurth told Dow Jones Newswires.

At the end of 2009, there were 108.3 million SIM cards active in Germany.

Right now, Germany has four mobile network providers: Vodafone Group PLC's local unit; Deutsche Telekom's T-Mobile; Telefonica's O2 and Royal KPN NV's E-plus.

That is the same number as in the U.K., for example, where following the joint venture between T-Mobile UK and France Telecom's Orange, there are also four main mobile providers.

Still, after KPN failed to secure spectrum in the most valuable 800 megahertz band in a landmark auction of fourth-generation frequencies in Germany, speculation grew that it could be subject of a bid by one of its rivals.

A joint venture, such as that of T-Mobile and Orange in the U.K., would also come under the regulator's definition of consolidation, as it would reduce the number of operators competing against each other.

Kurth said that E-Plus doesn't need to build up 4G networks in rural areas, a condition for buyers of 800 MHz spectrum, and also noted that it paid considerably less than its competitors for new spectrum.

Germany sold spectrum in the 800 MHz, 1.8 gigahertz, 2 GHz and 2.6 GHz bands in an auction that ended May 20 and netted EUR4.38 billion for the government.

The 800 MHz band is the most valuable as it is the most cost-efficient way to build next-generation mobile networks. Spectrum in the 2.6 GHz band is suited to build up 4G networks in urban areas, while that in the 1.8 GHz and 2.0 GHz bands is best suited to expand existing networks.

Deutsche Telekom, Vodafone and Telefonica secured two 10 megahertz blocks each in the 800 MHz band, while KPN got eight spectrum blocks in other frequencies. As a result,"no one went away empty handed," said Kurth.

After the auction, KPN said it took a "value-driven approach" that doubled its existing spectrum, and will help cut the cost for planned capacity and coverage increases.

Источник: Total Telecom

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