Germany Could Have Four 5G Players Following Auction

One of the worst fears of Germany’s three incumbent mobile network operators (MNOs) may now be realized: the market’s upcoming 5G spectrum auction could usher in a fourth MNO to the market less than five years after the number of mobile network players was reduced from four to three.1&1 Drillisch, the mobile virtual network operator (MVNO) that in 2014 enabled Telefónica Deutschland to gain approval for its merger with rival E-Plus, has now announced it will apply to participate in the auction of 2 GHz and 3.6 GHz spectrum bands and, if successful, will build and operate its own 5G network.The MVNO will join Telefónica Germany, Telekom Deutschland (Deutsche Telekom’s local unit or NatCo), and Vodafone Germany as bidders in the 5G auction, which is now expected to take place in March. 1&1 Drillisch also said it has secured $3.2 billion in credit lines to finance the acquisition of new spectrum assets.1&1 Drillisch has been in a somewhat unusual position since 2014, when it agreed to acquire 20 percent of the capacity of all mobile networks that came under the control of Telefónica following the completion of the E-Plus takeover. The MVNO also had the right to buy a further 10 percent of network capacity. The agreement enabled Telefónica to gain approval from the European Commission to buy E-Plus from KPN and merge the operator with its O2 Germany business.The contract also gave 1&1 Drillisch access to Telefónica’s future 5G network. However, that is clearly not enough for the virtual operator, which has long been nursing ambitions to become a full-fledged MNO with all the associated benefits.