5G: The 6.5 billion euro auction

Who doesn't know it? If YouTube videos load slowly or do not load at all, WhatsApp messages are not delivered immediately, or the social media Unable to post post. This is usually due to a slow Internet connection. But that could change now. In an auction lasting over twelve weeks, network operators secured their mobile radio frequencies. This includes Deutsche Telekom, Vodafone, Telefónica and Drillisch (1&1). Together, they are now transferring 6.5 billion euros to the federal government. More than expected.

But what is 5G anyway?

5G stands for the fifth generation of mobile communications. Predecessors are GSM (2G), UMTS (3G) and LTE (3.9G, 4G). 5G is therefore a new mobile radio standard that enables faster surfing on the Internet. But 5G is not limited to faster downloads and shorter loading times on laptops or smartphones. Faster data transmission benefits companies that rely on future technologies in particular. New trends such as the networking of robots and machines, and autonomous driving require 5G networks.

How does this high price come about?

Anyone who wants to set up their 5G network must take part in an auction for radio frequencies. In Germany, the Federal Network Agency is the auctioneer. In Germany, frequencies are always awarded for a specific period of time. For example, mobile radio frequencies that were used for 3G in the past are now being auctioned off to use or expand 5G networks. This is also due to the fact that frequencies are scarce and demand here exceeds supply. The four participants mentioned above are bidding on various frequency packages or “blocks”. By the way, Deutsche Telekom secured most of these blocks. The German State receives the proceeds from the auction. In addition to billions of euros, the Federal Network Agency also requires the fulfilment of additional performances.

Is everything better now with the fifth generation of mobile communications?

This is where opinions differ. For example, one of the additional conditions is that at least 98% of households per federal state must be supplied with at least 100 Mbit/s by the end of 2022. Anyone who has now counted will quickly notice that there are some parts of Germany here unsupplied will stay. Furthermore, the providers complain that they now lack the financial resources spent on the auction elsewhere. Among other things, when expanding the network. At the same time, however, Federal Minister of Transport Andreas Scheuer would like to use 70% of the proceeds to promote fixed-network broadband expansion. Scheuer would like to use the remaining 30% to technically modernize Germany's schools. However, the end user could benefit from strong competition. This is because the involvement of a new competitor (1&1 Drillisch) could result in lower prices for the end user. Cheaper contracts are also urgently needed, as the prices for 5G-enabled smartphones (which were announced for mid-2019) will not be exactly cheap. The Chinese manufacturer Huawei announces for its so-called Mate X A price of a whopping 2,229 euros. And competitor Samsung also cites a price of 2000 dollars for its 5G-enabled smartphone.

Can 5G mobile communications be used immediately?

5G can already be used, but only on small test installations. For example, on Hamburger Hafen. However, anyone who wants 5G permanently must move their place of residence to South Korea. The network there is already nationwide. Expansion is also being rapidly progressed in Switzerland. In Germany, on the other hand, we will have to wait a bit longer. Vodafone wants to make the new network available to 20 million people in Germany by 2021. This corresponds to around a quarter of the German population, the rest must be satisfied with the 4G network (which Vodafone has not yet fully expanded). Telekom, on the other hand, is talking about reaching 99% of the population. But only in 2025. And here, too, you can be skeptical, because a lot of radio masts have to be upgraded or even reinstalled. In addition, not all 5G frequencies are yet available. Ultimately, however, the allocation of frequencies is a first major step towards technological development.

Is 5G a reasonable alternative to WLAN?

As was already made clear in the previous section, it will be a few more years before 5G will be available in Germany.
In order to also be able to implement 5G, not only new radio stations are required, but also a much higher geographical density of base stations with much smaller radio radii, as well as much wider frequency spectra in the air than are available for LTE today. All of this makes the feasibility of 5G in Germany enormously difficult. In addition, with a high level of security, there will be no technology that will overtake WLAN in closed rooms.
It is therefore safe to say that 5G in Germany is neither currently nor in the next few years a useful alternative to conventional WLAN.

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