interview
The mobile phone operator 1&1 wants to build a fourth German cell phone network – but so far only a few masts are transmitting. Ralph Dommermuth, boss and majority shareholder, about his expansion goals and competition with major rivals.
tagesschau.de: Five years ago you bought frequencies with a commitment to build your own mobile network. The promises of expansion have flopped one after the other.
Ralph Dommermuth: Slow down now! The frequency allocation was associated with two expansion obligations: to reach 25 percent of households by the end of 2025 and 50 percent by 2030.
And then there are intermediate goals such as “1,000 5G antennas by the end of 2022” or the network launch by the end of last year. To be fair, with the 1,000 antenna locations, you have to take into account that our most important expansion partner, Vantage Towers, left us stranded.
Vantage Towers is part of Vodafone and has not fulfilled its contractual delivery commitments. The cartel office is investigating the matter. This is primarily why we did not initially reach the “1,000 5G antennas”, but our network has been fully functional since December 8, 2023. So: so far two intermediate goals, one of which we achieved and one of which we didn’t.
tagesschau.de: Not even a year late.
Dommermuth: Yeah right. Since the mouse bites from no thread.
tagesschau.de: How many masts are transmitting now?
Dommermuth: We had 1,063 towers as passive infrastructure despite the failure of Vantage Towers at the end of last year. Around 100 of these locations are now in operation.
“It’s hard work”
tagesschau.de: Your competitors – Telekom, Vodafone, O2 – have tens of thousands of masts. How are you ever going to catch up?
Dommermuth: How long has Telekom been doing mobile communications? Over 50 years! It is clear that we cannot catch up on this lead quickly. As I said, we had major problems with our main supplier in 2022. In 2023 we have caught up well.
The bottleneck is the locations. If possible, they must be located in the middle of a radio cell, the mast construction must fit statically and be approved by the radio beams. As I said, we now have 1,063. We were able to take over 550 of these in the last quarter alone. Connecting the locations to fiber optic lines and screwing on the antennas is only a matter of time. This is hard work.
tagesschau.de: But you are still miles away from the competition.
Dommermuth: Our argument as newcomers is not: “We have more antennas than the others”. Our argument is: “We have the most modern technology”. Our “Open RAN” works with standard computers and standardized interfaces. This is done everywhere in IT. Only So far, special systems have been built in mobile communications. Hardware, software and antennas in previous mobile communications come from only one manufacturer. You don’t look inside, you can’t get anything in between.
In contrast, we build flexibly using commercially available components from a variety of suppliers and are planning over 500 regional data centers. Here we control the antennas using software. Our group company 1&1 Versatel operates a network with more than 50,000 kilometers of fiber optic lines. From there we connect the data centers and from there the antennas.
“Come in to invigorate competition”
tagesschau.de: What do your customers get out of it?
Dommermuth: We have stepped up as the fourth network operator to stimulate competition and create innovations. Our novel technology has so far only been used in Japan and the USA. Not only does it make us independent of manufacturers like Huawei, it also allows applications in real time. Data is processed directly in the regional data centers on site and does not have to be transported via the Internet. That’s the future.
tagesschau.de: How much does an antenna location cost you?
Dommermuth: If you’re talking about purely new buildings – for example on a roof – a Pi radio mast costs 100,000 euros. If you build a tower, it can easily cost 500,000 euros. It depends on its height. Then there are the antennas, which cost around 100,000 euros. And the connection involves every meter of fiber optic that has to be laid. So that depends on the distance to the respective data center – I can’t give you a price.
tagesschau.de: They have not yet presented a balance sheet for 2023. From the available figures one can roughly conclude that investments of 700 million euros in the mobile network are being made. Does that work?
Dommermuth: We do not publish this figure separately. But investments in mobile networks and fiber optics are indeed in this range. Overall, we are planning to build the fourth German mobile network in the first step by 2030 with investments of around seven billion euros. It is one of the largest private investments in infrastructure.
The interview was conducted by Ingo Nathusius, hr, for tagesschau.de.