United Internet to Start German Mobile Network This Year: Welt

(Bloomberg) --

United Internet AG is set to launch Germany’s fourth mobile phone network this year, Die Welt newspaper reported, citing Chief Executive Officer Ralph Dommermuth.

The company’s unit 1&1 Mobilfunk has started building the network after purchasing 5G frequencies at an auction, according to the report. It will be available near 1,000 base stations by end-2022, and rival incumbents Deutsche Telekom AG, Vodafone Group Plc and Telefonica Deutschland Holding AG, the newspaper said. 

So far, 1&1’s more than 11 million mobile customers have been using Telefonica and, to a lesser extent, Vodafone networks, according to Die Welt said. The company will offer mobile services via WiFi routers located in customers’ homes that will be connected to its 5G network, Dommermuth told the newspaper.

Smartphone users are expected to have network access in mid-2023, and mobile rates will be very attractive, but without a price war with other operators, according to Dommermuth.

According to the rollout rules imposed by the regulator, 1&1 must use the auctioned 5G frequencies to reach half the population in Germany by 2030. Dommermuth said he wants to get to the target earlier.

The accelerating 5G-led network-transformation may tip carriers’ cash costs toward overheads, away from capital spending, and pressure midterm profit margin, analysts at Bloomberg Intelligence wrote this week. Deutsche Telekom shares rose on Friday after a report that Germany’s former state-owned carrier is working with Goldman Sachs Group Inc on a deal that could see its towers business valued at 18 billion euros ($19.6 billion).  

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