Three Companies Get Nationwide WiMAX Licenses in German Spectrum Auction

It’s done, it’s over and it looks like it has been a great week for the wireless Internet in Germany. After a four day auction, three companies have each received a nationwide license to deploy Broadband Wireless Access (BWA) networks in the 2.5 3.5 GHz band. The three companies are DBD (Deutsche Breitband Dienste GmbH), Clearwire (WiMAX operator already active in the U.S.) and Inquam (partly owned by NextWave Wireless) and all have indicated that they will use their licenses to build WiMAX networks.

Total price of the licenses is 56 million euros which includes some regional licenses acquired by local companies. All three companies who are now likely to rush to beat the competition to the market already have WiMAX deployment experience. DBD already operates small WiMAX islands in Germany while Clearwire and Nextwave have already deployed WiMAX or pre-Wimax networks in the U.S.

From the end users point of view it’s good to see three companies now poised to compete with each other. There’s a lot of pressure now to roll out networks as quickly as possible as the first one is likely to get the major share of customers in areas without DSL or other fast Internet connectivity. Competition will also ensure that prices will be competitive, again good news for users. And finally, three additional nationwide wireless high speed Internet companies will also put some pressure on the four incumbent UMTS operators.

56 million euros in licenses sound like a lot at first. However, these companies "only" need to get 5-10% of people in Germany to sign up to their services in order to drop the impacting of the fees on end user prices to the order of a few of cents per user per month. For details on this, the background of the auction, frequency bands, bandwidths, etc., take a look here and here.

My WiMAX Expectations In Germany For The Next Few Years

I wonder if three nationwide networks will be able to successfully compete next to the four UMTS operators and DSL. I would not be surprised to see some mergers down the road. It also seems certain to me that all three companies will start deploying their networks in undeserved DSL regions first and then work their way towards DSL covered areas to compete head on with DSL and 3G/3.5G in addition to offering their existing WiMAX subscribers national roaming possibilities.

In contrast to 3G networks which were designed for handheld devices and seamless handovers of calls from cars and trains, WiMAX network roll outs are likely to have a different focus. I expect that these networks will mainly target users with notebooks at first who use the Internet in a nomadic rather than a truly mobile fashion. This helps to save costs as fewer base stations are required. Once demand picks up and truly mobile WiMAX devices like smart phones become available, the networks might even be densified to allow a more mobile experience for the user.

Interesting times are ahead. I’ll keep you posted!