German telcos partner to plug rural notspots, moan again about auction
- Deutsche Telekom, Voda, Telefonica agree in principle to build and share 6,000 new sites
- Partnership also covers transport links including road, rail, and inland waterways
- Telcos insist auction rules were excessive as they agree to save millions in rollout costs
Germany's big three operators have agreed in principle to build and share new mobile towers in a bid to meet rural coverage obligations. The deal also provided a fresh opportunity for them to complain about this year's 5G spectrum auction.
Deutsche Telekom, Telefonica and Vodafone have signed a letter of intent that, all being well, will see them coordinate the deployment of 6,000 new mobile sites in rural areas, and alongside roads, railway lines and inland waterways. New MNO 1&1 Drillisch has been invited to participate on the condition that it undertake an equal share of the network expansion.
Under the rules of this year's 5G auction, German telcos are required to cover 98 percent of households, and all major highways and train lines by 2022. No mean feat given the 2-GHz and 3.6-GHz band spectrum that went under the hammer in said auction doesn't exactly lend itself too well to long-range coverage.
"The coverage requirements imposed by the Federal Network Agency (BNetzA) at the spectrum auction in 2019 call for investments worth billions of euros. The three mobile operators continue to express the view that the conditions imposed upon them are excessive and do not comply with applicable legislation," Deutsche Telekom said in a statement.
There is also the not-so-small matter of the €6.5 billion that German operators splurged on the spectrum itself. For its part, DT shelled out €2.17 billion for 2x20 MHz of 2-GHz spectrum and 90 MHz of 3.6-GHz spectrum. Last week, it cut its dividend to €0.60 per share from €0.70 last year, due in part to the high price it paid for the frequencies.
The telcos said by working together they expect to save a "significant amount of time and money" on their rollouts. The plan is that each operator sets up an equal number of sites, which can then be fitted with each operator's own antennas and equipment.
There is no word yet on how they intend to allocate different geographic areas to different partners. Deutsche Telekom said they aim to hammer out the finer details by spring 2020 at the latest, after which they can begin properly planning the network expansion.
Just the beginning
As has been well documented, sharing passive infrastructure like mobile masts is rapidly becoming the new normal. China Unicom and China Telecom are among the latest to buddy-up. There are also recent examples from Belgium, Japan, the UK and Italy.
Active network sharing – such as base station equipment and backhaul networks – has also elbowed its way onto the agenda, as telcos strive for ever more efficient ways of deploying 5G at scale. And further down the line, we might see network-sharing extended to other areas of the network. One possible candidate could be edge compute and storage infrastructure. It would be far more cost efficient for operators to build and share a single mini data centre than to build their own ones next door to each other. Another way of doing it would be for a hyperscaler to build the facility and then rent capacity to operators.
All those savings probably won't stop operators complaining about allegedly onerous auction rules though.
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