With the symbolic press of the button of an old stopwatch, which was also used to kick off Germany's first auction of mobile frequencies back in 2000, the auction process of the frequencies for the new mobile communications standard 5G in Germany started on Tuesday.
All major network operators in Germany, Deutsche Telekom, Vodafone and Telefonica as well as the United Internet subsidiary 1&1 Drillisch, are participating in the auction by the German federal network agency (Bundesnetzagentur) for the new 5G frequencies.
The proceeds from the auction, which are estimated between 3 and 5 billion euros (3.4 to 5.7 billion U.S. dollars), will go to the German government, which is planning to invest the money in digitization and for a better digital infrastructure in schools in the country.
However, the proceeds will be significantly lower than for the 3G mobile frequencies in 2000 when the Bundesnetzagentur raised over 50 billion euros.
Jochen Homann, president of the federal network agency Bundesnetzagentur, told the German public broadcaster ARD that he is expecting the process to be completed within the next three to six weeks.
The scheduled start of the auction had been threatened by injunctions filed by the three large network operators against the auction regulations that were set up by the Bundesnetzagentur. The responsible administrative court of the German city of Cologne, however, rejected all injunctions so that the auction started as planned Tuesday.
The Bundesnetzagentur is obliging the winning bidders to provide at least 98 percent of German households as well as all major highways and railroads with fast mobile internet connections. Another important requirement is that other companies must be allowed to use the 5G networks.
"The companies were forced into a corset of requirements that calls into question the economic viability of the planned investments," said Achim Berg, president of the German digital association Bitkom prior to the auction on Monday. It would still remain unclear whether the allocation rules for the 5G frequencies were legal at all, Berg added.
Lawsuits filed by the network operators against the allocation rules of the Bundesnetzagentur for the 5G frequencies are still pending at the administrative court in Cologne.
"In addition, regulatory measures have been announced that could significantly change the competitive environment after the auction," said the Bitkom president, adding "Never before has a frequency auction been afflicted with similar uncertainties."