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5G frequency auction by the Federal Network Agency – 5 questions and answers about the auction

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The first frequencies for the new 5G communications standard will be auctioned off in early 2019. 5G represents a quantum leap in the use of digital and mobile media for both the German economy and industry, as well as for private users. This technology is the next major step in Germany's transformation into a digital location. But what is going under the hammer exactly at the 5G auction? And for what purpose? Here are the five must-know facts!

5G frequency auction

What frequencies are being auctioned and when?

Specifically, the frequency ranges are 2 GHz and 3.4 to 3.7 GHz. The 2 GHz frequencies come from the former UMTS licenses which network operators must repurchase at auction. The 3.4 to 3.7 GHz range is one of 5G's pioneer bands and will enable gigabit speeds in the future. The auction is scheduled to take place in the first or second quarter of 2019.

How many billions will the auctions raise?

The expected total revenues for all 5G frequencies have been evaluated differently over the past months. In October, the press referred to government sources according to which the Ministry of Finance expects revenues of EUR 4-5 billion. The sum total of the starting bids for the spectrum on offer is 1.1 billion euros. For comparison, at the last frequency auction in 2015, bidders together spent around EUR 5.1 billion euros.

Why do some frequencies have to be re-auctioned?

Currently, the frequencies in the 2 GHz band are used for UMTS (3G). With these frequencies we currently achieve more than 97% network coverage for the entire population. Since the licenses for these frequencies expire at the end of 2020, operators must bid for the spectrum again in order to maintain the existing coverage quality.

The new 3.4 to 3.7 GHz frequency band will be used to further improve our networks. This will allow high data rates at significantly faster speeds and low latencies. Channel bandwidths of 100 MHz are suitable for more data-intensive applications and for the precise supply of smaller radio cells. With microcells we can quickly and flexibly expand the mobile network precisely where customer requirements are particularly high. This narrow density is particularly important in major urban areas with many users. However, high frequency bands at more than 3 GHz are not suitable for nationwide coverage.

Will users have to buy new devices now?

No. The LTE network (4G) is an essential part of 5G and will of course continue to operate and be available in the future. Moreover, it will also take some time to roll out the complete infrastructure for the new mobile standard. However, new user devices will be required to access the new 5G standard.

How long will the 5G frequencies licenses last?

The licenses up for auction are limited to the end of 2040. This period is necessary to plan the network rollout and to recoup the significant investments involved. In this way, Deutsche Telekom and its partner companies can continue to work on the reliability of 5G technology and develop standards for wireless internet on a sustainable basis. The Federal Network Agency is expected to announce the final rules for participation in the auction at the end of November.

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