Germany's 5G auction raised €6.5B and made winners cover 98% of households

Germany entered 2019 without a 5G plan while rivals raced ahead, and its rural mobile coverage was patchy. The Federal Network Agency (BNetzA) decided the spectrum award itself would fix both problems.

The auction ran from 19 March to 12 June 2019: 497 rounds over 52 days for 420 MHz in the 2 GHz and 3.6 GHz bands, with four operators — Deutsche Telekom, Vodafone, Telefónica and new entrant 1&1 Drillisch — competing for more spectrum than was available.

Total bids reached €6.5 billion ($7.31 billion): Deutsche Telekom paid €2.2 billion for 130 MHz, Vodafone €1.9 billion, Telefónica €1.4 billion, and 1&1 Drillisch €1.1 billion for 70 MHz, securing a fourth network.

The design's sharp edge was the condition attached to every license: winners must cover 98 percent of households and all major highways and rail lines by the end of 2022 — coverage obligations that operators later called excessive, and which forced them into network-sharing deals to meet.

Sell spectrum and rural coverage in one auction

Coverage obligations rode the auction instead of needing a separate rural subsidy.

Spectrum caps and reserve rules let a fourth operator enter the market.

Operators paid a public price for frequencies the market clearly valued.

Licenses tied to rollout deadlines turned purchase into a build commitment.

If a public good (rural coverage) must follow a private asset (spectrum), attach it to the license: the auction then prices both, and there is no separate subsidy to negotiate.

Operators complained the obligations were excessive, cut dividends partly because of auction prices, and agreed in November 2019 to build and share 6,000 rural sites to meet the 2022 deadline. The auction remains a reference case for bundling coverage duties with spectrum sales.