Vodafone to face investigation over 1&1’s rollout delays


Germany’s competition regulator, the Bundeskartellamt (Federal Cartel Office), will explore whether Vodafone has directly or indirectly hindered 1&1’s rollout of 5G radio equipment

The Bundeskartellamt has announced that it will launch an investigation into Vodafone and its infrastructure subsidiary Vantage Towers, seeking to ascertain whether they have illegally impeded rival 1&1’s rollout of mobile services.

1&1 signed an agreement to piggyback on Vantage Towers’ mobile site infrastructure back in 2021, using the pre-existing infrastructure to significantly expand the reach of its burgeoning 5G network.

However, Vantage Towers’ rollout of additional tower infrastructure in Germany has been significantly delayed over the past year, potentially leaving 1&1 unable to fulfil its own rollout obligations.

“Powerful and dominant companies must not unfairly impede other companies. We will therefore scrutinise whether there are sound reasons for a delay in the provision of antenna locations for 1&1,” Andreas Mundt, president of the Federal Cartel Office, said in a statement.

1&1 is Germany’s newest national mobile operator, won 5G spectrum at auction in 2019. Since then, the operator has been gradually rolling out its own infrastructure across the country in anticipation of its commercial 5G launch later this year.

However, in order to reach the rollout targets as prescribed by the terms of its 5G licence, 1&1 needed the scale up its rollout quickly. As a result, the newcomer partnered with Vodafone’s tower spin-off Vantage Towers at the end of 2021, with the partners saying they expected 1&1 to be able to use the initial 3,800 rooftop and ground-based sites by the end of 2025, as well as over a thousand additional sites set to be built in 2022.

In reality, Vantage Tower’s rollout of additional sites has progressed far slower than expected, with 1&1 able to announce just five operational 5G sites earlier this year, compared to its target of 1,000.

As such, the new operator launched a formal complaint to the Bundeskartellamt, suggesting that Vantage and parent company Vodafone had failed to live up to their side of the agreement, presenting 1&1 with “ongoing obstacles” to their 5G rollout.

“The provision of the agreed locations was massively delayed and continues to be delayed,” noted the Bundeskartellamt in a statement.

The regulator noted that these sites would be imperative for the effective launch of 1&1’s commercial 5G services, scheduled to take place later this year.

The findings of this investigation will be crucial for 1&1, with the company facing its own investigation from the Bundesnetzagentur (Federal Network Agency) for having failed to reach its obligated rollout goals. If the Bundeskartellamt ultimately agrees that Vantage Towers has significantly hindered 1&1’s rollout capabilities, it seems unlikely that the Bundesnetzagentur would financially penalise 1&1 for its missed targets.

On the other hand, if the regulator does move forward with fining 1&1, the cost could be up to €50,000 per missing base station, suggesting 1&1 could be looking at a bill for just under €50 million.

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