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MarketScreener Homepage  >  Equities  >  Xetra  >  1&1 Drillisch    DRI   DE0005545503

1&1 DRILLISCH

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Deutsche Telekom first to market in Germany with limited 5G rollout

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07/03/2019 | 09:11am EDT
Brochures with the logo of Deutsche Telekom AG are pictured at the shop in the headquarters of German telecommunications giant in Bonn

BERLIN/FRANKFURT (Reuters) - Deutsche Telekom stole a march on its competitors by announcing a limited rollout of 5G services in its German home market on Wednesday, targeting early adopters in cities with the high-speed mobile technology.

Existing 5G trials will be opened up to public use in the German capital Berlin and in Bonn, where Deutsche Telekom is headquartered, with four more cities to follow this year. By the end of 2020, 20 German cities will get 5G coverage.

"Our goal now is to get 5G to the streets, to our customers, as quickly as possible," Deutsche Telekom's Germany head, Dirk Woessner, told a glitzy presentation in Berlin.

Networks running on 5G offer much faster download speeds than existing 4G services while latency - or reaction times - is reduced to milliseconds. That can power multi-player video games or run billions of devices and sensors connected to the industrial Internet of Things (IoT).

Deutsche Telekom bid 2.17 billion euros (£1.95 billion) for 130 Megahertz of the 420 MHz of 5G spectrum allocated last month in Germany's longest-ever auction of mobile frequencies.

It competes with existing operators Telefonica Deutschland and Vodafone, while new market entrant 1&1 Drillisch also acquired spectrum to serve as the basis for a fourth national network.

The market leader, which is partly state owned, had complained that the high cost of the auction had left a "bitter aftertaste" and would sap the ability of network operators to invest in costly network upgrades.

But it will still be able to plough 5 billion euros this year into building out its network infrastructure, technology chief Claudia Nemat told the same briefing.

Germany lags countries like South Korea and the United States in rolling out 5G services.

Also on Wednesday, Vodafone said it is switching on its 5G network in seven U.K. cities and would continue to invest in rolling out 5G with the aim of reaching at least eight million consumers by 2021.

HUAWEI CUSTOMER

Deutsche Telekom partnered with Huawei Technologies in a Berlin 5G trial now being opened up to users, despite calls by the United States on its allies to bar the Chinese network vendor on national security grounds.

Instead of imposing blanket bans, Germany has toughened security rules on all network vendors. Deutsche Telekom, for its part, is conducting an ongoing review of its vendor strategy and said it was in close touch with regulators and the government on the matter.

"The most important criterion is network security," said Nemat. "And the most important statement to make here is that we should not depend on one vendor."

Germany's three main network vendors are Huawei customers and, industry sources say all are keen to build on their existing relationship with the Chinese vendor as they adopt 5G. The alternative, of ripping and replacing existing gear, could set back rollouts by years and cost billions, they warn.

CONSUMER FOCUS

Deutsche Telekom is making 5G-enabled devices available to early adopters with immediate effect, offering the Samsung Galaxy S10 5G smartphone for 900 euros as part of its all-you-can-use data package.

The unlimited data plan will be priced at 85 euros a month.

It is also marketing a mobile 5G hotspot hub from HTC, which offers speeds of up to 1 gigabyte per second and can run up to 20 devices, at a price of 556 euros, plus a 75 euro monthly fee for unlimited data use.

"We are doing this for the people who want to be there at the very start," said Michael Hagspihl, head of consumer business.

Deutsche Telekom will bring 300 5G-enabled antennas into service this year, making use of its newly acquired 3.5 Gigahertz spectrum that is most suited to urban coverage.

More broadly, the company will continue to build 2,000 new masts per year, bringing the total to 36,000 by the end of 2021, as it strives to meet coverage requirements for its existing 4G network set by the network regulator, said Woessner.

(Writing by Douglas Busvine; Editing by Deepa Babington)

By Markus Wacket and Douglas Busvine

Stocks mentioned in the article
ChangeLast1st jan.
1&1 DRILLISCH 0.25% 32.22 Delayed Quote.-27.69%
DEUTSCHE TELEKOM AG 0.17% 16.164 Delayed Quote.8.92%
HTC CORP End-of-day quote.
TELEFONICA DEUTSCHLAND HOLDING 0.21% 2.799 Delayed Quote.-18.26%
VODAFONE GROUP PLC 0.75% 161.58 Delayed Quote.4.66%
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