Incumbent mobile network operators block access to 5G for competitors
Fiber network operators lack advance services for competitive bundled products
90% of fiber network operators demand service provider obligation and expect improved competition from fourth mobile network operators
New frequency allocation conditions offer the last chance for the time being to promote competition and innovation in the interests of consumers in a targeted manner

Berlin, June 7, 2023 – A recent study commissioned by the German Broadband Communications Association (BREKO) and 1&1 Mobilfunk GmbH analyzes the competitive situation on the German mobile communications market. As a result, the telecommunications experts from SBR-net Consulting commissioned with the study identified significant competitive deficits.

5G availability suffers from a lack of competition

Three established network operators dominate the mobile communications market in Germany. A large number of sales partners and sub-brands give the impression of competition. In reality, however, there is hardly any competition for innovative services and tariff models, according to the study. In the 5G network, Telekom, Vodafone and Telefónica are particularly restrictive in shielding competition and delaying the offer of 5G tariffs as an advance mobile service. Competitors without their own mobile network are therefore unable to offer their own 5G-based services. This is to the detriment of consumers, who in many places have to be supplied with the outdated 4G technology.

The alternative fiber-optic network operators, i.e. Telekom’s competitors, who are the main drivers of fiber-optic expansion in Germany, also lack market-driven wholesale offers from the established mobile network operators in order to offer competitive bundled products.

Norbert Westfal, BREKO President and Spokesman of the Management Board of EWE TEL, explains: “The study makes it clear that there is an urgent need for regulatory action in the mobile communications market in order to strengthen competition. The foreclosure practice of the mobile network operators not only harms the supply and quality of mobile communications, but also has a considerable negative impact on companies that are expanding fiber optic networks in Germany. Without fair competition in which all providers can offer modern products, Germany will permanently fall short of its potential as a gigabit society. The Federal Network Agency must specifically counteract the drastic competition deficits with a robust service provider obligation. The entry of the fourth mobile network operator also offers additional opportunities to promote competition.”

A market survey of 132 fiber-optic network operators conducted as part of the study shows that around 90% are in favor of an MVNO and service provider obligation that ensures market-driven access to the incumbent network operators’ wholesale services and also expect improved competitive conditions as a result of the fourth network operator entering the market.

Regulators have a duty with regard to frequency allocation conditions

The expiry of the current frequency allocations in the 800 MHz, 1,800 MHz and 2.6 GHz ranges on December 31, 2025 offers the last chance to stimulate competition on the German mobile telecommunications market until the next but one frequency allocation from 2034. The study believes that the regulatory authority has a duty to create conditions that promote competition in order to set the right course for the future of the German telecommunications market at this crucial time – in order to protect consumer interests, exploit innovation potential and support the expansion of fiber optics in Germany.

MVNO and service provider obligation necessary

The current frequency allocation conditions stipulate that the incumbent mobile network operators must negotiate with other mobile and fixed network operators and mobile service providers on advance services – without the right to fair offers. This negotiation requirement has proven to be ineffective and must be strengthened by a so-called MVNO and service provider obligation. A service provider obligation ensures that the alternative network operators can obtain fair access to market-driven wholesale services from the established mobile network operators.

Additional opportunities for improved competition through fourth network operator

The market entry of the fourth mobile network operator can improve competition at all levels, both by offering services directly to end customers and by offering wholesale services to service providers and alternative network operators. However, as the new entrant must first build a nationwide network, a fair share of the mobile spectrum as well as non-discriminatory national roaming, including access to the 5G market standard, is necessary. This is the only way a new entrant can offer competitive mobile products nationwide during the development phase of its own network. And only under this condition can the fourth network operator provide marketable products for remarketing.