German LTE auctions end

After 27 days and 224 rounds of bidding, the auction of 4G frequencies has ended in Germany. The state earned a mere 4,4 billion euro for the spectrum, which is needed to provided services based on the up-and-coming LTE (Long-Term Evolution) mobile-phone standard.

Mobile operators shelled out close to 50 billion euro back ten years ago for the UMTS spectrum and wound up having to write off their investments, as UMTS didn’t turn subscribers into iPhone users way back then.

Behemoth Vodafone D2 paid the largest amount, namely 1,42 billion euro for a total of 12 blocks. O2 Germany, which is owned by Spanish operator Telefónica, bought 11 blocks of frequency spectrum for 1,38 billion euro. Deutsche Telekom bought 10 blocks for 1,3 billion. E-Plus, the German mobile subsidiary of Dutch telco KPN, decided to save money and spent merely 283,64 million euro on eight blocks.

E-Plus spent so little and received so little. In contrast to 02, Deutsche Telekom and Vodafone, the Dutch-German sibling came up empty handed in the 800MHz spectrum. The 0,8GHz spectrum allows operators to cover very wide areas with only a handful of radio masts.

E-Plus will have to invest more money in LTE infrastructure than its competitors. The result is sure to have consequences for the business model of E-Plus, whilst rivals can offer 4G data services on comparably low investments.

Only the four existing mobile operators were allowed to participate in the auction. The Federal Network
Agency didn’t allow new kids on the block to enter the game.

A graphic overview of the auction can be found here.