Bundeskartellamt examines potential anti-competitive impediment of 1&1 by Vodafone and Vantage Towers

Following a complaint filed by 1&1 Mobilfunk GmbH, Düsseldorf, the Bundeskartellamt is examining whether Vodafone GmbH, Düsseldorf or its affiliated company Vantage Towers AG, Düsseldorf, may have violated German and European competition law by impeding 1&1’s options for co-using radio masts.

Andreas Mundt, President of the Bundeskartellamt: “We welcome the intended market entry of 1&1 as a fourth mobile network operator in Germany from a competition perspective. It is clear that to develop its own mobile phone network a company has to make high investments and take entrepreneurial risks when taking such a step. It is a key task of competition law to set fair rules of play for companies’ business practices. Powerful and dominant companies must not unfairly impede other companies. We will therefore scrutinise whether there are sound reasons for a delay in the provision of antenna locations for 1&1.”

The telecommunications company 1&1 offers DSL and telephone connections as well as voice and data plans for several mobile networks. When the company first purchased frequencies at an auction back in 2019, its declared goal was to become Germany’s fourth network operator. 1&1’s purchase of the frequencies was coupled with a statutory obligation to expand the mobile network.

Vantage Towers is the Vodafone Group’s former radio mast division, which was listed as a stock company in March 2021. The parent company of the Vodafone Group initially remained the majority shareholder of Vantage Towers after flotation. Vantage Towers markets and manages the Vodafone Group's outsourced portfolio of existing base station sites, which comprises approximately 19,400 antenna locations in Germany. The locations continue to be used by Vodafone as the main tenant and are thus an essential part of Vodafone’s German mobile phone network. However, Vantage Towers’ business model in principle also involves renting out surfaces for antenna installations to mobile network operators other than Vodafone.

In the spring of 2021, 1&1 and Vantage Towers contractually agreed on such co-use of a large number of locations. In the course of 2022, however, the provision of the agreed locations was massively delayed and continues to be delayed. 1&1 relies on the use of these locations to start its own mobile network, which is scheduled to become operational this year.

Irrespective of the Bundeskartellamt’s proceeding, the Bundesnetzagentur is currently examining whether 1&1 must be fined for failing to meet its obligation resulting from its purchase of frequencies at an auction in 2019 to commission 1000 5G base stations within the specified period. Whereas the Bundesnetzagentur is examining compliance with the frequency holder’s obligations pursuant to the criteria set forth in the German Telecommunications Act (Telekommunikationsgesetz – TKG), the Bundeskartellamt’s proceeding is based on assessing whether Vantage Towers’ and Vodafone’s business practices on the “supplier side” could be objectionable under German and European competition law standards.