Which cell phone network is best for me – Telekom, Vodafone or O2? Consumers ask themselves this question every now and then. In the future you can add an option to the list.
Seven years after the end of E-Plus, Germany has a fourth cell phone network again. The telecommunications company 1&1 officially activated its mobile services this Friday. “This is a big day for us,” said company boss Ralph Dommermuth in Montabaur. Federal Transport Minister Volker Wissing (FDP) praised the company as a driver of innovation. New 1&1 customers will now be connected to the company’s network. However, the network currently only consists of very few antenna locations; at the end of September there were 60. For comparison: O2 has more than 28,000. Where 1&1 does not have its own antennas, customers are connected to the O2 network.
So far there are cell phone networks in Germany from Telekom, Vodafone and Telefónica Deutschland with its O2 brand. There are also so-called virtual network operators who use the capacity of established providers for their mobile communications business and pay rent for it. The United Internet subsidiary 1&1 has been such a virtual network operator so far. In 2019, company boss Dommermuth decided to stand on his own two feet and take part in a frequency auction. The company bought usage rights for 1.1 billion euros in order to be able to broadcast on certain frequencies. The company plans to spend a total of 5 billion on the network by 2030.
Slow network expansion
1&1’s network expansion only got off to a late start, and the company is threatened with a fine due to a significant delay. After the difficulties with the expansion, this should pick up speed next year. According to the requirements of the Federal Network Agency, the company’s antennas must reach at least 25 percent of German households by the end of 2025 and at least 50 percent by the end of 2030; according to the company, this would be possible with 12,600 antenna locations. The remaining households should have a network with roaming.
For a long time, Germany had four cell phone networks, but in 2014 O2 took over its competitor E-Plus. The networks were merged gradually until 2016. After that there were only three cell phone networks, now there are four again.
If you are already a 1&1 customer, nothing will change for the time being. With the start of the network, new customers will have access to the antennas, but the existing number of around 12 million contract customers will only be gradually transferred to the new network by the end of 2025. In summer or autumn 2024, a Vodafone contract for national roaming, i.e. radio connections away from the 1&1 locations, will also apply. That means, to put it simply: Wherever it says 1&1 today, there is a lot of O2 in it. And in the future there will be a lot of Vodafone in it.
Started as a landline replacement product a year ago
In order to comply with a government regulation, 1&1 had put its few antennas into operation for a landline replacement product before the end of 2022: households near the locations could get mobile communications and therefore did not need a landline contract. Anyone who walked past the antennas with their smartphone was not connected. The mobile phone network launch was initially planned for the summer quarter of 2023, but was then postponed. Now the time has come.
Federal Minister Wissing came to the celebration on Friday in Montabaur. He was full of praise for the company from the state in southwest Germany. “The more network operators we have, the more we invest in our digital infrastructure, the better it is for the digital society,” said the liberal, pointing to the federal government’s goal of Germany having full coverage with the 5G wireless standard by 2030. More competition and therefore more innovation are good for this, said Wissing.
Innovation driver with Open Ran
1&1 relies on an open radio access network (Open Ran). The competition also sees great potential in this concept, but when it comes to regular operations, it tends to hold back. 1&1 is now moving forward. In contrast to the closed systems previously used by the industry, which are tied to individual manufacturers, Open Ran standards and interfaces are open. This means that components from different companies can be used; according to the company, there are more than 80 providers in the 1&1 network. The innovative network should have a very low response time (latency).
“Our network is based on an open infrastructure, which means we are not dependent on a supplier such as Huawei,” says Domnmermuth, referring to the controversial network supplier from China, whose components the competition has still installed.
Positive consequences for consumers expected
Consumer advocates rate 1&1’s market entry as positive. “Although the existing networks of the three providers are constantly being improved and more powerful, consumers are still exposed to dead spots and, more recently, slightly rising prices from some providers,” says Felix Flosbach from the NRW consumer advice center. “The launch of another network can lead to new competition in an established market, which can result in better networks and cheaper prices for consumers.”
Jens-Uwe Theumer from the comparison portal Verivox says that the fourth network operator will bring a breath of fresh air and more competition into the market. For a long time there were four cell phone networks in Germany, but in 2014 O2 and E-Plus merged. Now the number of cell phone networks has increased again to four. “For almost ten years there were three providers of roughly the same size who had no interest in major disruptions,” says Theumer. “1&1 is breaking this down now.” The market will become more dynamic, with more choices for consumers. “With an average gigabyte price of 2.50 euros, Germany is currently the third most expensive mobile Internet provider in Europe.”
1&1 wants to have more frequency blocks
The important question for the company is whether the next mobile phone auction will take place in 2024. So far, the company has only used frequency blocks in two radio bands, but additional blocks in other bands are necessary for an optimal, comprehensive network. Therefore 1&1 wants to buy more. According to the Federal Network Agency’s plans, the auction should be canceled and existing usage rights should be extended – then 1&1 would be left out and the top dogs Telekom, Vodafone and 1&1 would be strengthened. In Montabaur, these authorities’ plans are viewed very critically.