BONN (dpa-AFX) - Competition in the German mobile phone market could soon intensify: With a so-called service provider obligation, the large German cell phone network operators are to be forced to let smaller competitors onto their network. For companies like Freenet and EWE Tel, which rely on the networks of Telekom, Vodafone and Telefonica Deutschland (O2) to sell cell phone contracts, this would be a tailwind - their position would improve considerably. The network operators, on the other hand, reject the obligation to lease. Now politicians are speaking out and signaling that they would be in favor of such a requirement.

"Fair access for service providers strengthens competition," says Maik Außendorf, a member of the Green Party in the Bundestag. He adds that this benefits the interests of consumers, as competition ensures low prices and better service quality. Anke Domscheit-Berg, a member of the Left Party, is also in favor. According to the member of the Bundestag, this would stimulate competition and give consumers affordable access to up-to-date mobile rates. The Federation of German Consumer Organizations is also clearly in favor.

Politicians of other persuasions are more reticent, but let their basically positive attitude be known. For example, Hansjorg Durz, a CSU member of the Bundestag, says that functioning competition, even with service providers, is a clear goal. FDP Member of Parliament Reinhard Houben considers competition in the mobile communications market to be limited. "Against this background, it should be examined very carefully whether it would not make sense to integrate a service provider obligation into the next frequency requirements."

Johannes Schätzl, a member of the German Social Democratic Party (SPD), is more cautious. "A service provider obligation is of course a very strong intervention in the market that would have to be well justified," he says, pointing out that network operators now have to refinance their investments.

The German cell phone market is dominated by the three network operators Telekom, Vodafone and Telefónica Deutschland. They each have a market share of more than a quarter, according to a 2022 study by the industry association VATM. Only 17 percent of mobile service revenue goes to the competition. Among the small players, Freenet is still the biggest with eight percentage points. Freenet is not doing bad business; the Hamburg company is profitable and intends to increase its profits in the next few years.

Representatives of network operators have their hair standing on end when it comes to the issue of service provider obligations. They argue that competition in the mobile market is working just fine, and they fear that their investments in new networks would be partially devalued by the leasing obligation. "The demand for a 5G leasing obligation at fixed junk prices would slow down network expansion in Germany," says a Vodafone spokesperson. There would be a "redistribution of funds away from those who urgently need them for the construction of new radio masts and to close radio gaps to those who want to further maximize their own profits without much effort."

A Telekom spokesperson argues similarly. "One builds and the other has the fun? That's not a fair model," he says. Germany has "a pronounced mobile market of third-party providers, including on Telekom's network." Even greater regulation than at present would "make it even more difficult to make the necessary investments in network expansion." That would also be unfortunate for customers, after all, network expansion is very important for them.

The aforementioned service provider obligation used to exist, but it has since expired. A softer "negotiation requirement" was stipulated in the 2019 spectrum auction. This means that the big three must negotiate with the small mobile companies without their own network - but there is no obligation to conclude a contract. Now, in a sense, the crucial question is whether contracts for 5G capacity were concluded under the negotiation mandate at the time - or whether it was a blunt sword that didn't help the smaller companies at all and left them out in the cold when it came to 5G.

So far, mobile companies that don't have their own network have relied on the slower 4G radio standard. But since 5G is now becoming more and more commonplace, access to this radio standard is enormously important. If the virtual network operators do not get 5G, they are likely to come under pressure on the market soon.

But do the smaller cell phone rate providers really not have 5G? Social Democrat Schätzl calls for more clarity and transparency in this regard. The Federal Network Agency should clarify all open questions and objectively present the state of affairs for this purpose, he says.

In fact, there were contract signings for 5G after 2019, but there were not many. A Freenet spokesman reports that they have three 5G tariffs. But these were "almost not in demand," partly because they were relatively slow - the maximum speed was lowered, so it's not as high as a 5G contract from Vodafone. In addition, these Freenet 5G tariffs are "premium," the company spokesperson said - meaning they are quite expensive.

A statement by Freenet CEO Rickmann von Platen makes clear just how heated the debate is. He accuses the network operators of "discriminatory behavior" that the network agency should finally put an end to. The big three reject the accusation of discrimination. Telefónica, for example, emphasizes that it is exercising the negotiation requirement "in a cooperative and constructive manner".

A decision on the service provider obligation is not yet in sight; the network agency will make it as part of the frequency allocation process in 2024. It is quite possible that the dispute will end up in court after that. The agency's advisory board, which includes federal politicians and state representatives, meets this Monday in Berlin. The controversial issue is likely to come up at that meeting./wdw/DP/zb