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German telco watchdog to detail spectrum auction

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CIOL Bureau
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FRANKFURT, GERMANY: Germany's telecoms watchdog is due on Monday to announce details and conditions for the biggest digital frequency auction since the allocation of UMTS licenses in 2000.

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The sale centres around licences for spectrum that will be freed up in the switchover from analogue to digital terrestrial television.

The auction for the spectrum, also known as the digital dividend, is expected to take place in the first half of 2010 and is part of an effort to speed up the rollout of broadband communications and increase coverage.

Demand for additional spectrum is high all across Europe and the frequencies coming up for auction are particularly well suited to expand coverage in rural and remote areas because they can carry mobile broadband over long distances.

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Ahead of the auction, smaller operators such as KPN's German unit E-Plus and Telefonica's O2 Germany have called on the regulator to ensure fair access to the important frequencies below one gigahertz for all mobile telecommunications providers by limiting the bidding rights for the larger players.

They argue that market leaders T-Mobile and Vodafone already have an early-market entry advantage.

As an alternative, E-Plus and O2 Germany have proposed that the regulator should reallocate some of the spectrum already in use.

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Current spectrum is used by mobile operators for voice calls but smaller operators want it to be used for data traffic as well.

Matthias Kurth, who heads the federal Network Agency, told Reuters on the sidelines of a telecoms industry event last week, that the bidding rights were fairly allocated.

"The smaller operators will be able to bid for more spectrum than the larger ones in the upcoming auction," he said.

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"But the conditions for the spectrum already allocated can not be changed until 2016," he added.

However, Kurth said he was not in principle opposed to changing the conditions for spectrum already in use and that the regulator would approach that topic in due time.

Germany, Europe's biggest market, follows Finland, Sweden, France and Switzerland in allocating digital dividend frequencies to mobile broadband.

UK regulator Ofcom is expected to hold its auction for the UK's digital dividend spectrum next year as well.

The auction in Germany will help the federal government work towards its broadband strategy, which calls for broadband with download speeds of at least 1Mbps to be available nationwide by 2010, and coverage of 50Mbps internet to reach 75 percent of German households by 2014.

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