As part of the 5G frequency auction which has just concluded in Germany, Telefónica Deutschland acquired a total of 90 MHz spectrum at a total cost of EUR 1.425 billion. The acquired spectrum breaks down as follows:
- 2 paired blocks in the 2.1 GHz band
- 7 unpaired blocks in the 3.6 GHz band
Including the spectrum already owned, Telefónica Germany now has a mobile spectrum of ~ 310 MHz (through 2025) and thus a highly competitive frequency position overall.
The Federal Network Agency wants to formally allocate the spectrum with effect of 1 January 2021 for 1 block of the 2.1 GHz spectrum and 1 January 2026 for the other 1 block. The 3.6 GHz spectrum will be made available over the next few years and fully from 2022 onwards. All of the acquired spectrum will mature in 2040.
Due to its physical propagation characteristics, the new acquired spectrum will be used to supply urban areas and industrial sites with 5G, delivering high data rates and low latency times. 5G technology therefore enables much more effective capacity management, so that network performance and overall capacity will increase as the standard becomes more widespread.
Consumers want benefit from 5G as the availability of related devices increases in the market. Until then, German mobile customers want to benefit from the ongoing intensive rollout of 4G.
Already in 2018, Telefónica Germany completed its network consolidation and connected to an additional 6,700 LTE stations; LTE population coverage is now at around 90%. Additional LTE sites by year-end 2019.
In addition, we will continue to roll out fiber in the backhaul by means of a variety of co-operations. We confirm our target of reaching ~ 70% of fiber penetration in the backhaul by 2022.
2015, 2018. Having proven our execution ability, we look forward to building on these achievements and our established market position. We are now entering the next phase of our digital journey through the process of becoming a Digital4Growth program between 2019 and 2022. We are continuing to work relentlessly to become Germany's Mobile Customer and Digital Champion.
Finally, we confirm our full-year outlook for 2019, our mid-term guidance including a capex envelope of approximately EUR 1bn and our dividend policy of a high payout ratio to FCF.