November 15, 2018

License Conditions in Upcoming Award Could Hinder 5G’s Promise for Consumers and Businesses

London : The GSMA today welcomed the German government’s decision to release the entire 3.4 to 3.8 GHz band (C-Band), essential for the future development of 5G services globally. Making available all of the spectrum in this critical band for 5G, in a timely manner, shows Germany’s commitment to European and global 5G leadership. However, the GSMA warns that some of the currently proposed conditions on the allocation of these vital frequencies may slow Germany’s 5G future.

Ultra-fast 5G networks will form the foundation of the world’s digital economy, supporting a wide variety of industry sectors. Imposing unncessary conditions that limit mobile operators’ ability and potential to deliver 5G creates a risk for all, industries and citizens alike.

“The C-Band is the most vital frequency band for 5G. Germany is demonstrating 5G leadership in the timely release of this vital spectrum, but risks undercutting its 5G future with unnecessary obligations,” said Mats Granryd, Director General, GSMA. “Spectrum is a limited resource and it must be used and managed as efficiently as possible to ensure a 5G future that will benefit all.”

The proposed coverage obligations for the 3.6 GHz band, for example, appear to disregard the laws of physics when it comes to the propagation characteristics of this mid-band spectrum. Although these frequencies can provide very high capacity, they only cover a relatively small area and are not well suited to wide area coverage, unlike spectrum in lower bands. To provide extensive rural coverage of mobile services, a combination of frequencies will be essential. Therefore, coverage obligations should provide the possibility of using any – and all – spectrum at an operator’s disposal to achieve the ambitious coverage conditions and deliver the best quality of services for consumers and industry. At the same time, coverage obligations should be realistic and not overburden mobile network operators.

In addition to coverage obligations, the GSMA believes there are other conditions proposed for the award that should be reconsidered by the regulator, Bundesnetzagentur. The current proposal, which includes potential roaming and wholesale obligations attached to the 3.4 to 3.7 GHz band, is a stark reversal of Bundesnetzagentur’s recent position, and introduces a critical level of uncertainty for operators investing in 5G networks in Germany.

Bundesnetzagentur is also urged to consider the implication that high reserve prices and fees will have on the market. GSMA analysis on spectrum pricing shows a clear link between high spectrum prices and poorer coverage, as well as more expensive and lower quality mobile broadband services, all of which hinder the take-up of services by consumers. Based on this insight, reserve prices for the upcoming spectrum award in Germany should be set at a minimal level that still allows the market to determine the true value of the spectrum.

The GSMA strongly believes that partnership and cooperation across all parts of business, government and society will be critical to deploying efficient and effective 5G networks, creating value for all. The GSMA therefore urges Bundesnetzagentur to reconsider the license obligations for the 3.4 to 3.8 GHz band and create a regime that ensures Germany’s spectrum resource is managed in the most effective way to benefit its citizens and businesses.