Germany’s 4G mobile broadband spectrum (radio airwave) auction is gaining momentum as the bidders have reportedly raised their offers for the most expensive and valuable 800 megahertz (MHz) frequency band. Bids totaled €3.73 billion (US$4.6 billion) after the hammer fell on May 18, 2010, with a few bids in the 800 MHz band exceeding €500 million (US$622 million).
The auction, which is the first of its kind in Europe, officially kicked off in Mainz, Germany, on Apr 12, 2010. The minimum bid price has been set at €1.5 million (US$1.9 million) per 5 MHz frequency block compared to €25.57 million (US$32 million) set in the 3G auction, which was held way back in 2000.
German telecom regulator Bundesnetzagentur is auctioning 4G radio spectrum in 41 frequency blocks across the 800 MHz, 1.8 gigahertz (GHz), 2.0 GHz and 2.6 GHz frequency bands. The winning bidders will use the spectrum to roll out mobile broadband services based on the emerging Long-Term Evolution (LTE) standard.
The four participating carriers in the auction, Telefonica (TEF), Deutsche Telekom (DT), Vodafone (VOD) and E-Plus, the German subsidiary of Netherlands-based carrier Royal KPN NV (KKPNY), are focusing on the 800 MHz and 2.6 GHz bands that are best suited for 4G LTE services. All these operators are vying to grab a chunk of spectrum in the 800 MHz band as it enables more cost-effective delivery of data traffic.
The multi-round 4G auction is expected to fetch between €6 billion and €8 billion (US$7.5 billion and US$9.9 billion), compared to the staggering €51 billion (US$63 billion) generated from the sale of 3G licenses ten years ago. The 4G auction sets a benchmark for the other leading economies in Europe that are expected to hold spectrum auctions in 2010-2011.
The growing popularity of next-generation wireless devices such as smartphones and associated bandwidth-hungry data applications have boosted demand for spectrum among carriers required to effectively handle the burgeoning data traffic.
Besides fostering the deployment of next-generation bandwidth-intensive services (such as high-definition video on handheld devices), the 4G spectrum auction will trigger sizable network investments in the rural and remote regions currently with little or no broadband connectivity.
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