CO2 turns against 1 & 1: New provider too risky for customers?

According to Vodafone, CO2 is opposed to 1 & 1 entering the market. The company has taken a position on the reallocation of mobile radio frequencies in Germany. From the point of view of the competition, 1 & 1 does not need to participate.

o2 against market entry by 1 & 1: that's behind it

In the run-up to the re-allocation of mobile radio frequencies in Germany, which is planned for 2023/24, the responsible Federal Network Agency retrieves a picture of the mood. Telefónica / o2 uses this opportunity to strengthen its own position, because the new competition should not necessarily participate.

For equal opportunity competition, "1 & 1 does not need 800 MHz frequencies" to supply customers nationwide. For this, 1 & 1 have "concluded a long-term national roaming agreement with Telefónica", writes Telefónica in a statement published by Harald Geywitz, Berlin representative of the Telefónica Basecamp (source: Basecamp).

Similar to the last time with the Vodafone boss, for whom 1 & 1 even poses a risk for the mobile network coverage, this is obviously not a disinterested assessment: As long as 1 & 1 uses the O2 network, you ultimately benefit from the development of the new provider.

In contrast, 1 & 1 would save usage fees in its own network. If you pass these savings on to customers, the price pressure could have an impact on the income of Telekom, Vodafone and o2 - which is not what they like to see there. In any case, building a wall against 1 & 1 is primarily not in the interests of consumers.

What do cellular frequencies have to do with me?

In everyday life, it is actually not clear to customers which frequencies their smartphone is currently using to connect when making calls or surfing the web. Nevertheless, they have a decisive influence on everyday use. The frequency bands in the range of 800 MHz are particularly decisive for mobile network coverage in the area.

The existing network providers argue that the constant re-allocation by auction causes unnecessary costs and thus slows down investments. Telefónica explains that everything has to be left as it is, "this is the only way to ensure the existing supply of the population." Conversely, 1 & 1 as a bidder at the next auction would be a risk.

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What O2 and Co. like to overlook in their own interest: From the consumers' point of view, there is a higher risk of the formation of monopoly-like structures the fewer networks are available on the market. At the moment it is Telekom, Vodafone and Telefónica / o2 that ultimately decide what mobile telephony costs in Germany. Because discount providers are also dependent on their networks, just like 1 & 1 is still.

In the interests of customers, it is when more providers compete with each other and better offers are made - a view that the Federal Network Agency also takes. The fundamental goals of the reallocation include improving the cellular network and coverage, as well as promoting competition for the benefit of consumers.