Auction of 5G licenses

FAQs on the new generation mobile phone technology

The new 5G mobile generation promises to transmit data one hundred times faster than its predecessor. As the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) auctions the spectrums, we answer all your questions relating to the new mobile standard.

Before the start of the auction of the 5G spectrum bands a journalist takes a photo of the 5G acronym with a smartphone at the Bundesnetzagentur in Mainz.

The 5G standard will transmit data significantly faster

Photo: picture alliance/dpa

What is 5G?

5G is the next (fifth) generation of mobile internet connectivity, promising speeds about one hundred times faster than the current 4G. The new standard also promises less latency, or delay, in transmission.

What makes 5G so important?

As well as using frequencies for mobile broadband, 5G will, in particular, be helpful in the development of innovative services and applications, including autonomous driving, industry 4.0 (the digitalisation of manufacturing) and telemedicine.

Who will benefit from 5G?

Initially it will be mainly businesses that benefit, for instance companies using the new standard in manufacturing. The 5G standard is indispensable for industry, allowing it, for instance, to network a large number of pieces of machinery and to ensure precise steering.

How do private users benefit?

Private users will only benefit directly from the new standards in future. Initially, any benefits will be indirect – the new standard will, for instance, ensure that equipment within hospitals is reliably networked and that a temporary 5G network is available at major events.

Will 5G soon be available nationwide?

A 5G network cannot be rolled out overnight; it will be developed step by step on the basis of the existing mobile network. The aim is thus to swiftly achieve nationwide coverage, guaranteeing the use of mobile phones and internet in rural areas too.

Will coverage be improved by issuing 5G licenses?

One of the conditions imposed by the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) is that by the end of 2022 a minimum of 98 per cent of households, all motorways and major trunk roads and railway lines will be served by a 100 megabit per second system. This will also improve 4G coverage.

What exactly is being auctioned?

A total of 41 lots are up for auction, in the comparatively high frequency 2GHz and 3.4 - 3.7 GHz spectrum bands. The spectrum consists of 420 MHz. The higher radio frequency spectrum offers relatively limited range but very high capacities.

Why is this auction taking place?

The spectrum auction is the first important element in the launch of 5G technology. Auctioning licenses is intended to ensure that the spectrum can be used at an early stage, as well as facilitating the swift, flexible and needs-driven extension of the mobile network in Germany.

Who is to conduct the auction?

The auction will be conducted by the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) on the basis of the provisions laid out in the Telecommunications Act (Telekommunikationsgesetz). The Bundesnetzagentur is an independent authority within the remit of the Federal Ministry for Economic Affairs and Energy.

Who can bid in the auction?

In addition to Telekom Deutschland GmbH, Vodafone GmbH and Telefónica Germany GmbH & Co. OHG, the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) has accepted a fourth bidder, Drillisch Netz AG.

How will the auction work?

The auction is taking place under strict security provisions. Bidders submit their bids in separate rooms in a stand-alone network. The 41 lots will be auctioned simultaneously with bidders able to bid for more than one lot. Each individual bidding round will end after one hour at the latest. The highest provisional bids made for each block will be published directly online and announced in the PR room of the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) in Mainz. 

How much can be bid?

A reserve price of between 1.7 million and 5 million euros has been set for each lot. The total reserve price is 104.6 million euros. Bids may only be increased in predetermined steps – which is also intended to prevent collusion among bidders. The total revenue that will be generated for the federal government is open.

How long will the auction run?

The auction was opened on 19 March at 10:00. The duration of the auction is open. All 41 lots are on offer simultaneously until such time as no further bids are submitted. In 2015 the spectrum auction ended after three weeks and 181 rounds of bidding, generating revenue of 5.1 billion euros.

How transparent is the auction?

There are clear rules, regulations and conditions for the auction. As soon as the auction starts, the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) will publish on its website the results of the latest rounds and of previous round of bidding.

What will the revenue be used for?

All revenue generated from the auction of 5G licenses will go to the special fund for digital infrastructure. This in turn will be used to finance the development of the gigabit network and the digital compact for schools. 70 per cent of revenues are to be channelled into the development of the gigabit network and 30 per cent will be earmarked for the digital compact for schools.

What about the security of the new 5G network?

The German government has always stressed that security is paramount with respect to the operation and expansion of the mobile network. For this reason, the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) has published the salient points of additional security requirements for telecommunications networks. These conditions apply equally to all companies.

Can we expect any health risks from 5G?

The further development of the mobile network with the new 5G standard is subject to the provisions of the 26th Ordinance relating to the Federal Immission Control Act (Bundes-Immissionsschutzgesetz) nationwide. The immission limits laid out in this Ordinance are based on the internationally recognised recommendations of the International Commission on Non-Ionizing Radiation Protection (ICNIRP) as well as the recommendations of the German Commission on Radiological Protection (SSK) and ensure protection against proven health risks and any significant nuisance caused by exposure to electromagnetic fields.

What is the goal of the German government?

In the coalition agreement, the government lays out its intention to make Germany a leading 5G market. The government thus aims firstly to achieve across-the-board 4G coverage. The conditions imposed in this auction by the Bundesnetzagentur (Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway) will go some way to achieving this.



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