Auction of UMTS licenses in Germany

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UMTS licenses were auctioned in Germany in 2000 and 2010. The Federal Network Agency and its predecessor RegTP auctioned licenses of frequency blocks for use by the Universal Mobile Telecommunications System to approved mobile phone providers .

Auction 2000

The first auction took place between July 31 and August 18, 2000 on the premises of the former regulatory authority for telecommunications and post (RegTP; today: Federal Network Agency ) in Mainz . Licenses of frequency blocks for use by the Universal Mobile Telecommunications System were auctioned . A total of around 50.8 billion euros were achieved, which means that the proceeds in Germany were absolutely higher than at comparable auctions in other countries.

Attendees

Eleven participants were admitted to the auction on May 31, 2000:

  • DeTeMobil (today: Telekom Deutschland )
  • Mannesmann Mobilfunk (today: Vodafone )
  • E-Plus (today own O 2 ; 2016 merger of E-plus and O 2 , conversion from E-Plus and BASE contracts to O 2 contracts in February 2016)
  • Viag Interkom (today: O 2 )
  • debitel
  • France Télécom / Mobilcom
  • Group 3G
  • Auditorium Investments (Hutchison)
  • MCI WorldCom
  • Vivendi
  • Talkline

However, until the actual auction began, the number had decreased. The following participants dropped out of the process completely in June.

In July, E-Plus and Hutchison founded a new consortium for joint auction participation, consisting of the E-Plus parent company KPN , the Japanese NTT Docomo and Hutchison Whampoa.

Thus, seven participants competed to bid for one of the maximum of six licenses.

E-Plus-Hutchison and Viag Interkom were later renamed E-plus 3G Luxemburg and O 2 respectively .

Auction process

A total of twelve frequency blocks were auctioned, whereby a successful bid in at least two blocks was required for the license to be granted. A maximum of three blocks could be allocated to a bidder. So four to six licenses were possible. On August 12, 2000, the bidder debitel left the auction. The highest bids at that time were just under 63 billion DM (32.2 billion EUR). The remaining six bidders could ultimately have received the final result at this price. Nevertheless, various companies bid on three frequency blocks in the following days in order to reduce the number of license holders from six to five or four. It was not until August 18 that all auction participants limited themselves to bids on two frequency blocks each, which ended the auction.

Results of the 2000 auction

The following important information is missing from this section:
Not only were FDD channels auctioned, but five TDD channels as well. These are not mentioned here at all.
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The six FDD frequency bands available in Germany were assigned as follows in 2000:

operator Uplink Downlink price
Vodafone 1920.3-1930.2 MHz 2110.3-2120.2 MHz 16.47 billion DM (8.42 billion €)
unoccupied 1930.2-1940.1 MHz 2120.2-2130.1 MHz (DM 16.45 billion to Group 3G / Quam ; returned later)
E-plus 1940.1-1950.0 MHz 2130.1-2140.0 MHz 16.42 billion DM (8.39 billion €)
unoccupied 1950.0-1959.9 MHz 2140.0-2149.9 MHz (16.37 billion DM to Mobilcom ; returned later)
O 2 1959.9-1969.8 MHz 2149.9-2159.8 MHz 16.52 billion DM (8.45 billion €)
T-Mobile 1969.8-1979.7 MHz 2159.8-2169.7 MHz 16.58 billion DM (8.48 billion €)

The minimum bid for all FDD tapes set by the regulatory authority for the auction was 600 million  DM (50 million DM per five-megahertz package).

All licenses were or are limited to December 31, 2020. The licensees had to provide at least 25% of the population by December 31, 2003 and at least 50% of the population by December 31, 2005 with UMTS services. Mobilcom and Group 3G did not meet these criteria.

This section is still missing the following important information:
Debate about the use of the proceeds: The big discussion right after what one should do with the money, the effects on the telcos involved
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Effects of the auction

The income flowed into the state budget. The mobile network operators were able to write off the acquired licenses in the following years and thus reduce their profit and tax burden. In addition, costs in the double-digit billions were incurred for expanding the networks.

As a result of the high investment sums, the participating companies had to raise outside capital and pay interest. In 2004, T-Mobile was the first company to open the UMTS network. The high costs put profit, share price and rating of the mobile phone companies under pressure in the time between the auction and the opening of the networks.

The winners of the auction include, in particular, suppliers such as Nokia and Blackberry , as they were able to sell new end devices.

VAT debate

Following the auction, mobile communications companies from numerous European countries took the position that the auctioning of these licenses involved sales subject to sales tax . Therefore, they asked for an invoice to be issued with a VAT ID and the input tax deduction to which they were entitled . In the case of Germany alone, this would have led to a pre-tax refund of 13.79% (i.e. approx. 7 billion euros) to the bidders. The consequences for the national treasuries of numerous European countries would have been grave in such a case.

However, the European Court of Justice ruled in two test cases that the transfer of the licenses was not subject to VAT law:

  1. Case C-284/04 "T-Mobile Austria et al." (Austria)
  2. Case C-369/04 "Hutchison 3G et al." (Great Britain)

other European countries

This section is not adequately provided with supporting documents ( e.g. individual evidence ). Information without sufficient evidence could be removed soon. Please help Wikipedia by researching the information and including good evidence.

In the run-up to the German UMTS auction, the British licenses had already been auctioned off in the spring of 2000. A result of 22.477 billion British pounds , about 38 billion euros, was achieved. In relative terms per accessible inhabitant, this amount is even higher than the result of the German auction.

In France, the licenses were awarded at the end of 2000 by means of a "beauty contest" taking into account the quality features promised by the providers (network coverage, speed of expansion). Initially, a fixed price of almost EUR 5 billion per license should be charged. However, after no three interested parties were found at this price, the government in Paris lowered the required amount to EUR 619 million. The process dragged on until 2002, and there was no longer an applicant for the originally planned fourth license.

Auctions in the Netherlands , Italy and Austria achieved lower revenues per accessible inhabitant.

UMTS license costs per inhabitant (rounded)
country Price per inhabitant Month of licensing
Great Britain 630 € April 2000
Germany 620 € August 2000
Italy € 200 October 2000
Netherlands 160 € July 2000
Austria 100 € November 2000

Auctions in Germany 2010

see also: Frequency auction 2010

According to an announcement by the Federal Network Agency at the beginning of February 2007, the returned and other UMTS frequency blocks were to be auctioned in 2008. Between April 12, 2010 and May 20, 2010 the digital auction took place in 224 rounds. Before the start of the auction, Airdata, together with E-Plus and Telefónica O 2 , sued the Federal Network Agency's procurement procedure before the Cologne Administrative Court, which was rejected by the Federal Administrative Court on April 7, 2010 in an urgent application.

Unused radio links of the military, radio frequencies no longer required, the license withdrawn by Quam after its business activities and the license voluntarily returned by Mobilcom were put up for auction . The so-called “ digital dividend ”, ie frequencies that were no longer used due to the switch to digital broadcasting, was particularly popular among mobile network operators . For these frequency blocks in the range of 800 megahertz, the highest bids were placed until the very end. However, E-Plus came away empty-handed.

The companies Telekom Deutschland, Vodafone D2, E-Plus and Telefónica Germany offered a total of 4.38 billion euros for frequency packages of 360 megahertz.

The companies offered in detail:

  • Vodafone D2 1.43 billion euros
  • Telefónica O 2 1.38 billion euros
  • Telekom Germany 1.3 billion euros
  • E-Plus 0.283 billion euros

The auction result was still below the cautious forecasts, which were between 5 billion and 8 billion euros.

The licenses originally auctioned by Quam and Mobilcom were halved (each 4.95 MHz in uplink and downlink), and now round off the bands of the other providers in the frequency band below and above: The Quam license was divided between Vodafone and E- Plus, the Mobilcom license was split between E-Plus and O 2 .

See also

literature

  • Mario Martini : The market as an instrument of sovereign distribution control - possibilities and limits of a market-controlled state "management of shortages" . Mohr Siebeck, 2008, ISBN 978-3-16-149332-4

Individual evidence

  1. ↑ Thomas Struk, dpa: Background: Telecom giants are haggling over UMTS licenses. In: heise.de/newsticker. July 30, 2000, accessed December 12, 2018 .
  2. ↑ Spiegel Online - 10 years UMTS
  3. ↑ Beneficiaries of the UMTS mobile communications standard from December 10, 2013 ( Memento from December 10, 2013 in the Internet Archive )
  4. ↑ when deducting sales tax at the tax rate of 16% from the gross amount, i.e. 16/116 of the same
  5. ↑ Request, Opinion and Judgment in Case C-284/04 "T-Mobile Austria et al." (Austria)
  6. ↑ Case C-369/04 "Hutchison 3G et al." (Great Britain")
  7. ↑ Message on tagesschau.de from February 6, 2007 ( Memento from March 1, 2009 in the Internet Archive )
  8. ^ Federal Network Agency ( Memento from April 11, 2010 in the Internet Archive )
  9. ↑ focus.de: Auction of mobile radio frequencies as planned (accessed on May 20, 2010)
  10. ↑ New frequencies mobile radio auction brings the state only 4.4 billion euros . ( Memento from May 22, 2010 in the Internet Archive ) Financial Times Deutschland; Retrieved May 20, 2010.