Barclays says possible delay in German spectrum auction could help all telcos

Telefonica Deutschland Holding AG

19/06/2023 11:24

** Barclays says a possible deferral of Germany's low-band
spectrum rights auction until 2030 could benefit all telecom
companies involved
    ** The country's 800MHz spectrum rights expire at end-2025
and the regulator is considering a potential auction for 2024;
however, the broker sees extending the rights to at least 2030
as the "most rational" scenario
    ** The broker notes mobile network operators Deutsche
Telekom  DTEGn.DE  ("overweight"), Vodafone  VOD.L  ("equal
weight") and Telefonica Deutschland  O2Dn.DE  ("overweight") are
in favour of an extension
    ** New entry 1&1  1U1.DE  is pushing for an auction, but
Barclays says an extension might be preferable due to delays in
its network rollout
    ** "We are sceptical: a competitive auction would not
guarantee that 1&1 would acquire spectrum, especially
considering the financial firepower of the other players
compared to 1&1," the broker says
    ** It adds a delayed auction would mean no expensive auction
in short term and no risk of 1&1 ending up without low-band
spectrum
    ** It downgrades 1&1 and its parent United Internet
 UTDI.DE  to "equal weight" from "overweight", based on 1&1's
Q4/Q1 results and guidance for slower network roll-out, which
implies higher roaming costs for a while
    
($1 = 0.9152 euros)

 (Reporting by Tristan Veyet)
 ((Tristan.chabba@thomsonreuters.com))