Germany's 1&1 switches to Vodafone for 5G network deal (updated)

1&1 AG

02/08/2023 15:08

(Rewrites to add details on contract in paragraph 1,2)
       LONDON, Aug 2 (Reuters) - German mobile and broadband
provider 1&1  1U1.DE  said it had agreed a deal for Vodafone
 VOD.L  to provide 5G coverage to its customers, ousting current
network partner Telefonica Deutschland  O2Dn.DE  by October 2024
at the latest.
    1&1, which is majority owned by United Internet AG
 UTDI.DE , said Vodafone would provide mobile coverage in areas
not covered by its new 1&1 network, including 5G, 2G and 4G,
under a deal that would be concluded as soon as possible.
    Telefonica Deutschland's shares slumped 16% to a three-year
low of 2 euros after the announcement, while parent company
Telefonica  TEF.MC  fell more than 7% in Madrid.  
    Shares in Britain's Vodafone rose 3% and 1&1  1U1.DE  soared
15%, set for its biggest one-day gain since 2008.
    1&1 is building a fourth mobile network in Germany, where it
competes with Deutsche Telekom  DTEGn.DE , Vodafone and
Telefonica Deutschland. 
    The new announcement marks a rapprochement between the two
companies after 1&1 filed a complaint with Germany's cartel
office, blaming its slow progress on rolling out radio masts on
Vodafone's Vantage Towers  VTWRn.H  infrastructure business.   
    Vodafone's new Chief Executive Margherita Della Valle is
focusing on improving the company's performance in Germany, its
biggest market.
    Vodafone said the commercial agreement with 1&1 was for 18
years, and it would start to deliver the 5G coverage to 1&1
customers from the second half of 2024. 
    It added that wholesale costs would be indexed to Vodafone's
mobile network cost to reflect the impact of inflation and
technological developments. 


 (Reporting by Sarah Young, Danilo Masoni, Hakan Ersen and Paul
Sandle; Editing by Kate Holton, Kirsten Donovan)
 ((sarah.young@thomsonreuters.com; +44 20 7542 1109; Reuters
Messaging: sarah.young.thomsonreuters@reuters.net))