Hamburg The latest generation of mobile communications, 5G, is fast – and expensive. With it, videos can be viewed in higher quality, and modern games can be played fluently on the go. Compared to its predecessor LTE, the high-speed networks transmit up to 20 times more data per second. As a rule, mobile phone providers charge a high price for this turbo. Because many discount customers are denied access to the new infrastructure.
This is also reflected in the tariff structure: contracts without 5G are offered on common comparison portals from around five euros a month. 5G tariffs with a similarly high data volume cost at least 14 euros.
This could change soon. The Federal Network Agency wants to decide on the introduction of a so-called service provider obligation (DAV) by next year at the latest. With their help, the competition in 5G should also pick up speed. Fiber optic providers or companies from outside the industry such as the shipping giant Amazon could then offer their own 5G mobile products. The prices could therefore fall.
As the Handelsblatt found out, the instrument has recently gained support again. According to this, members of the traffic light coalition in the influential, politically occupied advisory board of the network agency made sure that an application text was “sharpened” accordingly. In the decision at the end of June, the committee finally called for service providers to be guaranteed “fair and non-discriminatory access” to the networks.
According to advisory board circles, the FDP in particular made a name for itself as the driver of a new regulation that would strengthen smaller providers such as Freenet at the expense of network operators. In Germany, these are Deutsche Telekom, Vodafone and Telefónica with the O2 brand. Mobile phone providers without their own network have to negotiate capacities with them and partly adopt the given tariff structures.
Freenet sees itself “locked out”
Representatives of the responsible Federal Ministry for Digital Affairs and Transport (BMDV) recently signaled that the House of Volker Wissing (FDP) would be open to new regulations in principle. It oversees the network agency, but it can make its decisions independently.
A service provider obligation is “completely superfluous”, according to Höttges.
(Photo: Stefan Boness/Ipon)
A spokesman told the Handelsblatt that the BMDV is now demanding that a market analysis required for the introduction of a DAV be carried out “quickly”. It is hoped that this will provide a “basis for possible competitive measures”. The upcoming decisions of the network agency are a “central course for the coming years”.
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Within the industry, the conflict over the instrument has recently escalated. According to reports, there have been several high-level talks with the responsible institutions in recent months.
“Completely superfluous,” said Timotheus Höttges, CEO of Deutsche Telekom, in an interview with the Handelsblatt at the end of June. The competition is intact and the market share of service providers in Germany is already higher than elsewhere.
The fear of Amazon
“If the Federal Network Agency doesn’t act, we’ll basically remain locked out with 5G,” complains Freenet boss Christoph Vilanek. Without a DAV, the network operators “are not prevented from further price increases”.
Most recently, Vodafone or Telefónica had raised the costs for several tariffs. The average revenue per mobile phone customer in Germany – adjusted for inflation – has been declining for years. While entry-level tariffs in Germany are comparatively cheap, customers usually pay more for contracts with high data volumes than in other countries.
With a DAV, the balance of power would shift. Providers such as Freenet or EWE-Tel would be the winners. The network agency would give you regulated and therefore usually cheaper access to the 5G networks of the big ones. In this way, they could design their own products – and would not be dependent on the distribution of existing tariffs.
Smaller providers without their own infrastructure have so far been dependent on the goodwill of the network operators for 5G.
(Photo: Freenet AG)
Although the network operators are currently negotiating, they are not obliged to open it. Fiber optic providers would also benefit from a DAV, since they could sell attractive, discounted fixed-line and mobile phone tariff combinations.
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Above all, the network operators fear that a financially strong Internet company could also use a new regulation to get started. Because Amazon, for example, would calculate a mobile phone offer completely differently than a telecommunications company, prices could then possibly drop particularly sharply.
Despite all the fears, the tech group’s bogeyman also serves as an urgent lobby argument. In 2018, when the introduction of a DAV was imminent, Vodafone’s ex-Germany boss Hannes Ametsreiter warned Chancellor Angela Merkel (CDU) in a letter of a “dangerous gateway for American internet giants, which would completely call into question further investments in the market”.
O2 boss sees a “devastating signal for further investments”
This time too, Telekom and Co. see their high expenses for network expansion as potentially devalued – and are relatively openly threatening to reduce them. Telefónica Deutschland boss Markus Haas recently spoke of a “devastating signal for future investments. The gigabit plans of the federal government would thus be set back for many years.” In the past, when a regulation comparable to the DAV was in force, a significant decline in investments was not evident.
In the industry as well as in politics, the question of whether a DAV would be fair and in the interests of the general public has been debated for months. Top managers of the large telecommunications groups fear that their already heavily regulated business model could be weakened in the long term.
Telekom in particular is suffering from a high debt burden and has promised its investors higher dividends. Specialist politicians such as Maik Außendorf (Greens) or Maximilian Funke-Kaiser (FDP) spoke out in favor of a reform in an interview with the Handelsblatt.
“The current situation, in which tariffs with unlimited or very high data volumes are twice as expensive in Germany as in our neighboring countries, is difficult to justify,” said Funke-Kaiser. Increased competition could therefore encourage lower prices.
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The Federal Network Agency has now declared that it intends to examine the “competitive conditions in the mobile communications market”. In doing so, she implements the demands of the Advisory Board and BMDV. The companies WIK Consult and Ernst & Young should deliver a corresponding report by autumn. It is considered the first step in the direction of DAV, as the Telecommunications Act explicitly requires a “market analysis” before such measures are enacted.
Meanwhile, the industry must continue to argue – and tremble. At the moment, “the need for a change in the existing service provider regulation cannot yet be conclusively assessed,” the network agency said on request. In 2024, the presidium headed by Klaus Müller wants to decide whether it will force Vodafone and Co. to open their networks in the course of the upcoming frequency allocation.
Assistance: Nadine Schimroszik
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