The Bundesnetzagetur’s bumper auction of low frequency licences has seen Vodafone, Deutsche Telekom and Telefonica Deutschland pay a combined €5.08bn (US$5.76bn) for the rights to the spectrum. Airwaves in the 700 MHz, 900 MHz, 1800 MHz and 1.5…
The Bundesnetzagetur’s bumper auction of low frequency licences has seen Vodafone, Deutsche Telekom and Telefonica Deutschland pay a combined €5.08bn (US$5.76bn) for the rights to the spectrum.
Airwaves in the 700 MHz, 900 MHz, 1800 MHz and 1.5 GHz bands were made available, with Vodafone walking away with the most frequencies.
The British operator paid €2.09bn (US$2.37bn), picking up more blocks of 1800 MHz spectrum than its rivals. Deutsche Telekom spent €1.72bn (US$1.95bn) and Telefonica Deutschland put down €1.19bn (US$1.35bn).
Prior to the auction, the expectation was that operators would pay less than that as reserve prices were set low and the transparency of the auction format incentivised the operators to share spectrum.
However, commenting on the tender, Lee Sanders, a partner at spectrum consultancy Aetha Consulting, said it would be wrong to say the bidders had overpaid.
“The bidding went higher than perhaps expected, which was in part driven by Vodafone’s desire to purchase a fifth block in the 1800 MHz band, but if you take a step back, the prices paid are still quite cheap when compared to similar auctions in other markets.”
Sanders noted that the much-prized 700 MHz spectrum sold for €1bn (US$1.13bn) in Germany, much less than the €2.5bn (US$2.83bn) reserve price announced today in France for its 700 MHz auction.
The prices paid in Germany were much lower than those in the country’s first 4G auction in 2010, largely because E-Plus, the market challenger at the time, has subsequently been snapped up by Telefonica Deutschland in a four to three consolidation.
Going back further, Germany’s sale of 3G spectrum in 2000 saw six parties compete for licences and raised more than €50bn.
In-market consolidation across Europe could see lower spectrum prices become commonplace. It has been suggested that less competition for airwaves, and thus lower prices, is one of the drivers for mergers in the sector.
