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German 5G auction to cause increase in spectrum costs

At Germany’s 5G spectrum auction, 4 bidders offered EUR 1.03 billion in the 75th round, says the German Federal Network Agency.

For the 2 GHz range, Vodafone offered the highest amount of up to EUR 58.9 million. For multiple blocks, Deutsche Telekom offered up to EUR 54.1 million. For one block, 1&1 offered EUR 53.5 million and Telefonica placed a maximum bid of EUR 38.2 million.

For 3.6 GHz, Telefonica bid the highest amount which was EUR 26.8 million for a single block. Deutsche Telekom offered EUR 26.2 million for two blocks while Vodafone bid EUR 26 million for multiple blocks. 1&1 big a maximum of EUR 8.6 million.

The aggregate of the bids on the first day alone from the four bidders amounted to over EUR 332 million.

However, many people held a negative opinion about the auction. Deutsche Telekom CEO Tim Hoettges said that the way in which the auction is being run has resulted in a shortage of spectrum which could in turn increase costs and leave operators with insufficient funds to build 5G networks.

"An artificial shortage of public resources is being created, which may push up the price," Hoettges said. "In the end, there is no money for the build-out."

Industry analysts have forecasted that the amount raised at the auction by the four bidders could reach at least EUR 3 billion.