Spectrum holdings are a key determining factor of the mobile experience operators can deliver to their customers. This is why spectrum auctions are pivotal moments in the telecom industry which can dramatically change the service quality operators will be able to provide for years to come. In fact, the quality of the mobile experiences varies greatly depending on the frequency band users connect to. Higher frequency bands allow for more users to enjoy faster connections, while lower frequency bands cover wider areas but deliver, on average, lower speeds.
Opensignal analyzed Germany’s current 4G spectrum holdings and found that, although 100 Mbps download speeds are already a reality for a number of smartphone users in the country, those bands and speeds are limited to the few who live in big cities. For example, a large percentage of Opensignal's users only connect to 4G on lower frequency bands, which generally deliver much slower average download speeds.
Some users already enjoy 100 Mbps on 4G networks
After witnessing dozens of trials where operators worldwide have tested speeds of several gigabits — Germany included — a 100 Mbps requirement might not sound like a big deal. In fact, some smartphone users in Germany already enjoy three-digit speeds. We see that 4G Peak Download Speed in the country — Opensignal’s metric that measures the speed experienced by the 98th percentile of users — reached 114.1 Mbps. However, Germany’s average 4G Download Speed still falls much lower at 26 Mbps in our measurements.
Understanding why the top 2% of our users experience speeds more than four times the average will help us contextualize the speed requirements set in the 5G auction. Let's start by taking a look at the average speeds our users are experiencing on 4G spectrum bands that are currently in use in the country.
Opensignal has analyzed Germany’s current average 4G Download Speeds by spectrum band and found that they range from 7.8 Mbps on Band 8 (900 MHz GSM) to 64.8 Mbps on Band 7 (2600 MHz). We have observed that when users connect to 4G networks on higher spectrum bands they can enjoy faster-than-average speeds, but when they connect on lower sub-1 GHz bands — either 800 MHz or 900 MHz — 4G Download Speeds fall well below the national average of 26 Mbps.
Higher frequency band use is mostly limited to urban areas — so outside of the cities users experience lower than average speeds
Mobile network operators tend to extensively deploy lower spectrum bands both because they offer greater range, allowing them to connect many more users, and because they provide better indoor coverage. On the other hand, operators usually deploy cell sites utilizing frequencies above 2 GHz — which possess shorter radio wave propagation — in densely populated areas such as big city centers. In urban locations the need to connect a large number of users demands the high capacity which those frequencies can provide, while helping offset the costs of deploying the denser networks that urban areas need.
Let’s now look at how much Germany is using its allocated 4G spectrum. The visual below displays our measurements grouped by frequency bands and shows the use of different spectrum bands in the country, rather than any measure of geographical coverage.
For simplicity, we grouped our measurements into three categories, plus one combination chart. We then included France to provide a comparison on different band deployment strategies:
Blue — Speed tests taken when the device connected to 4G networks utilizing frequency bands of sub-1 GHz. These bands offer good signal propagation and good coverage, but have more limited capacity and typically lower speeds.
Orange — 1800 MHz, which balances pretty good speed and capacity with reasonable signal propagation.
Red — Bands above 2 GHz, which are the highest capacity 4G bands but possess lower signal propagation.
Combined view — We have also added a cumulative view of our readings by spectrum band. We overlaid the three previous maps, with red dots at the top and lower frequency bands at the bottom.
Starting with the two leftmost images we can see that in both Germany and France mobile operators deployed sub-1 GHz networks nationwide, with Opensignal users being able to connect to those bands across most of the two geographies. The second set of maps tells us that 4G networks operating on the 1800 MHz band are widely used across the two countries and tend to be available in more densely-populated regions. Then, in the third maps, we notice that devices can connect to the 2100 MHz and 2600 MHz spectrum bands mostly in big cities.
However, it is by focusing on the last set of maps that we can capture the big difference among the two countries. By overlaying the first three sets of maps we see that the predominant colors in the two countries are different:
France’s map appears mostly red, and shows that users in major urban areas tend to have access to frequency bands above 2 GHz — which on average deliver faster speeds.
However, Germany’s predominant color in the visual is blue, and we can see that our users who do not live in the big cities tend to connect to 4G networks utilizing sub-1 GHz bands — which offer lower average download speeds.
Germany's operators will struggle to meet coverage obligations with current 5G frequency allocations
Opensignal data shows Germany’s operators have mostly deployed higher spectrum bands in densely populated areas, while a large portion of the population still connects to 4G networks utilizing the sub-1 GHz bands — which deliver average 4G Download Speeds of 7.8 Mbps and 15.8 Mbps. In part, this is because of the regulator’s historical focus on setting 4G coverage requirements for rural areas in past 4G spectrum auctions.
Now, Germany’s 5G mobile spectrum auction has been keeping lawyers busy as all three telecom operators have filed lawsuits against the conditions outlined by the German regulator Federal Network Agency (Bundesnetzagentur). Among the executives that have raised concerns in the last few months, Deutsche Telekom CEO Timotheus Hoettges stated that operators would be unable to fulfil coverage obligations set out in the auction as they are, and that operators were not satisfied with the regulations on national roaming — as conditions were not clear. The much-debated coverage obligations set by the regulator require license winners to supply speeds of 100 Mbps to at least 98% of households in each state by the end of 2022, as well as on key transport routes like highways and railways.
The 5G mobile auction will award frequencies in the 2 GHz band (2 x 60 MHz) and much of the 3.6 GHz band (1 x 300 MHz) — which will be particularly useful in cities and other densely populated areas. But in order to meet the coverage requirements and deliver minimum download speeds of 100 Mbps to 98% of households in each state, operators will need to either deploy those high frequencies nationwide, or find additional spectrum better suited to covering wide areas and capable of delivering 3-digit speeds. Else, a sizeable portion of users will continue to connect to the internet using the sub-1 GHz bands of the 4G networks. Incidentally, the Bundesnetzagentur already suggested that additional frequencies better suited to covering wide areas will be made available in the coming years. Yet license winners still currently face these coverage requirements with a 2022 deadline — whether more spectrum is auctioned or not. To put that in context, 9 years after the 2010 4G spectrum auction, all three German operators have not yet covered 98% of the population with 4G networks. In their latest annual reports Deutsche Telekom and Vodafone reported they covered 97.8% and 92% of the population with 4G networks, while O2 stated it provided 95% of combined UMTS/LTE population coverage.
The precise terms of this 5G auction will be the foundation of the German mobile network experience for years to come. It's clear from our analysis that Germany's mobile operators have not deployed higher frequency bands outside of the main cities and major urban areas as extensively as their peers in France. Now, the mobile industry needs additional spectrum in frequencies that enable good coverage, and possess high bandwidths capable of delivering download speeds greater than 100 Mbps — otherwise operators will find it hard to meet the coverage obligations attached to Germany's current 5G auction. With the spectrum available in this auction — which is in the 2-4 Ghz range — operators will need to greatly increase the footprint of their existing network bands above 2 Ghz to hit the target, which means more sites, and likely increased investment costs.