Competition on the German mobile phone market could soon intensify with the introduction of a service provider obligation. This would require large network operators such as Telekom, Vodafone, and O2 to allow smaller competitors like Freenet and EWE Tel to use their networks for the sale of mobile phone contracts. While this would benefit smaller providers, network operators are rejecting the obligation to rent. However, politicians are supporting the idea, as they believe it will strengthen competition and benefit consumers with lower prices and better service quality.
The German mobile phone market is currently dominated by Telekom, Vodafone, and Telefónica Germany, each with a market share of over a quarter. Only 17 percent of mobile service revenue goes to smaller competitors. Freenet, the largest small provider, is profitable and aims to increase its profits in the coming years. Network operators argue that competition already exists in the market and fear that the rental obligation would devalue their investments in new networks. They believe it would hinder network expansion and redirect funds from important infrastructure projects.
Access to the 5G network is crucial for virtual network operators, and a service provider obligation is seen as necessary to ensure they have fair access. Currently, there is no obligation to conclude a contract during negotiations between large and small mobile companies. The availability of 5G for smaller providers is limited, with slower and more expensive options compared to those offered by the big three.
The debate around the service provider obligation is heated, with accusations of discriminatory behavior from smaller providers and denials from network operators. The Federal Network Agency is expected to make a decision on the obligation in 2024 as part of the frequency allocation. The issue may end up in court, and it will be discussed by the agency’s advisory board, which includes federal politicians and state representatives.
