June 5, 2019 / 2:41 PM / 21 days ago

German regulator raises minimum bids to hurry up epic 5G auction

FRANKFURT (Reuters) - Germany’s federal network regulator on Wednesday ramped up minimum bids in a bid to wrap up the country’s 6 billion euro 5G mobile spectrum auction, which has dragged on for months.

The auction, which started on March 19, is now into a record 467th round - more than double the last record set in 2010. Critics say its design is skewed towards maximising revenues and lacks a clear mechanism to draw matters to a close.

For weeks, bids have crept up by a couple of million euros in each round as auction teams, cooped up in a former army barracks in the western city of Mainz, waged a desultory contest for one or two of the 41 spectrum blocks up for grabs.

The BNetzA regulator said it was making use of its discretion to increase the minimum bid size, and was doing so for blocks in the 3.6 Gigahertz band where the auction has dragged on into its 12th week.

“The goal is to accelerate the auction,” the BNetzA said.

The 3.6 GHz spectrum is most suited to 5G applications, such as running ‘smart’ connected factories, thanks to its high data-carrying capacity. Bidding has ground to a halt for the 2 GHz frequencies on offer, which have greater geographic range.

In the latest round 1&1 Drillisch, challenging to become Germany’s fourth network operator, raised market leader Deutsche Telekom by 13 million euros to bid 145 million euros for one spectrum block.

Auction participants, which also include Vodafone and Telefonica Deutschland, have filed legal action against the BNetzA over the auction saying that its terms are too onerous.

Although auction proceeds have reached 6.2 billion euros, they are still far short of the record 50 billion euros raised in the 2G auction back in 2000, which drove some companies out of the German market and forced others to merge.

Reporting by Douglas Busvine; Editing by Elaine Hardcastle

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