September 17, 2018 / 4:26 PM / a year ago

German regulator disappoints lawmakers with 5G auction draft

* Says providing nationwide coverage would be “too costly”

* Conservative lawmakers critical of terms

* Auction proposal to be reviewed on Sept. 24

FRANKFURT, Sept 17 (Reuters) - Germany’s telecoms regulator pushed back against calls from politicians to require operators to provide coverage across the country as it published draft terms for a planned auction of 5G licences on Monday.

The 119-page draft here released by the BNetzA will be reviewed by its supervisory board on Sept. 24. The body is made up of elected lawmakers, many of whom are under pressure from voters to plug holes in Germany's existing mobile networks.

BNetzA President Jochen Homann said the proposed auction terms were demanding, including a requirement for data speeds to double, but he cautioned that the frequencies on offer were not suitable for countrywide coverage.

“A nationwide buildout with 5G technology would be excessively costly,” Homann said in a statement, adding that longer-range frequencies would be auctioned in the years to come.

The auction build-up has been marked by controversy over whether its terms would enable the entry of a fourth operator in Germany, with critics saying a lack of competition has left Europe’s largest economy lagging its rivals.

Lawmakers from Chancellor Angela Merkel’s ruling Christian Democrats, in a letter to the BNetzA seen by Reuters, said the draft did not represent “a solid basis” for the 5G auction.

In their letter, they said the existing network operators - Deutsche Telekom, Vodafone and Telefonica Deutschland - should be required to provide coverage along transport routes and in rural areas.

They also said BNetzA should require network operators to provide access to competitors in areas where the latter don’t have coverage, with the agency acting as a referee in the case of dispute.

That condition, if implemented, could open the door for United Internet, which owns virtual mobile operator 1&1 Drillisch, to join the 5G auction.

The network regulator plans to auction 2 Gigahertz and 3.6 Gigahertz frequencies that would be suited to enabling digital industrial supply chains, in which sensors and robots are able to ‘talk’ to each other.

This spectrum can carry high data volumes but does not have the range to ensure that smartphone users in remote areas would get a signal. The BNetzA plans to auction such frequencies in the early 2020s.

A final decision on the terms for issuing 5G licences is due in November, with the auction slated for the first quarter of 2019, the BNetzA said. (Reporting by Markus Wacket and Nadine Schimroszik; Writing by Douglas Busvine; Editing by Jan Harvey)

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