DGermany has a fourth cell phone network again, although initially a very small one. Seven years after the E-Plus takeover of o2 turned four networks into three, the Montabaur-based telecommunications group 1&1 officially inaugurated its new 5-G network on Friday.
CEO Ralph Dommermuth, who is also the founder and head of the 1&1 parent company United Internet, described it as an “important milestone in our company history”. With the new network, the group wants to “make a difference in the German mobile communications market”.
However, the network got off to a rocky start; the Federal Network Agency had originally required the company to have set up 1,000 antenna locations by the beginning of this year. In fact, there were only five at the beginning of the year, which Dommermuth also blamed on his expansion partner, the radio tower company Vantage Towers. The company, which is still majority owned by its competitor Vodafone, has always rejected the accusation.
At the end of September, 1&1 only had 60 antenna locations, of which only a handful are actually operational, but the company is planning on having 200 locations at the beginning of 2024. The competitor o2, which belongs to the Spanish mobile phone provider Telefónica, has 28,000 5-G antennas, while Deutsche Telekom has a good 10,000.
Coverage with the new mobile phone technology has increased significantly in recent years; in relation to the population, the antennas already reach more than 90 percent. However, expansion in rural areas falls short, which is why there are always blank spots there, as expansion there is more expensive and also produces less profit due to the lack of many customers.
Dommermuth wants to reach a quarter of all German households by 2025 and half of all German households five years later with its new cell phone network. The billionaire bought frequencies at the mobile phone auction in 2019 in order to become the fourth network operator, and 1&1 paid 1.1 billion euros for it. 1&1 wants to invest 5 billion euros in its network by 2030.
The entrepreneur has positioned himself as a counterweight to established network operators. The Federal Cartel Office and the Monopolies Commission welcomed the plans for a fourth network, citing more competition. Federal Transport Minister Volker Wissing (FDP) said at the opening that he was looking forward to “more lively competition in the mobile communications market”.
Dommermuth also pokes fun at the competition when it comes to his network activation. In full-page advertisements he quoted the bosses of Vodafone, O2 and Telekom with their reservations about Open RAN wireless technology. The 1&1 network, which the group built together with the Japanese technology company Rakuten, is based on this.
The antennas are not controlled locally on the radio masts, but rather via decentralized edge data centers via servers in the cloud. According to Dommermuth’s plan, this will make the company more independent of individual providers of network equipment. 80 companies are already working on the O-RAN network, “without dependencies on dominant suppliers from China,” said 1&1.
This is of course a swipe at the competition, all of which have installed technology from the Chinese supplier Huawei in their networks. There is always a political struggle over its possible ban; in Great Britain, for example, network operators have to remove the Chinese company from their networks. Huawei always rejects allegations of espionage.
What Dommermuth doesn’t say in his advertisements and the promotion of the new network: First of all, he is just as dependent on Chinese network technology, as he is currently still using his competitors’ networks. Nothing will change for 1&1 customers anyway because they are still on the Telefónica network. However, they are gradually being moved to the network of competitor Vodafone, with whom 1&1 recently agreed a contract with access to the 5G network for up to 18 years. This brings important capacity utilization to the German company of the British telecommunications group, which is why Philippe Rogge, Vodafone’s German boss, welcomes his competitor with open arms.
“Every operator who closes dead spots is making an important contribution to Digital Germany,” said Rogge. “And every customer who uses our 5G helps us make our network even better.” Telefónica must ensure that by 2025 at the latest, when 1&1 customers increasingly leave the network, it will have found other providers to fill the capacity. To this end, the company is reportedly negotiating with mobile phone providers without their own network, such as Freenet.
Deutsche Telekom, whose CEO Tim Höttges has been critical of Dommermuth and his ambitious network expansion plans, held back when asked on Friday. “Let’s take a look,” a spokesman simply said. The largest German telecommunications group regularly emphasizes that 1&1 has so far inadequately fulfilled its expansion obligations.
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