The Bundeskartellamt has today sent Vodafone Group, Vodafone GmbH and Vantage Towers AG its preliminary legal assessment relating to the shortcomings in providing antenna sites to 1&1. Already in 2021, Vodafone’s group company Vantage Towers had contractually agreed to provide the sites. However, massive delays have occurred since then (see press release of 2 June 2023). Vodafone and Vantage Towers are now given the opportunity to comment on the allegations.

Andreas Mundt, President of the Bundeskartellamt: “Based on the findings to date, the delay in the contractually agreed provision of sites is to be considered an anti-competitive impediment to 1&1’s market entry as a fourth network operator. According to the information available to us at this stage, the delay and its negative effects on competition in the relevant markets could, and in view of the prohibition of abusive practices under competition law, should indeed have been avoided. At the current stage we are considering using our powers as a competition authority to enforce the provision of the sites which have not yet been made available.”

Vantage Towers is Vodafone Group’s former radio mast division. For a long time after its divestment and also during a period in which it was listed as a stock company, the Vodafone Group’s parent company remained the majority shareholder of Vantage Towers. Vantage Towers is now jointly controlled by Vodafone Group and two financial investors. The company markets and manages approximately 20,000 antenna sites in Germany. The sites continue to be used by Vodafone as the main lessee and are thus an essential part of Vodafone’s German mobile network. Vantage Towers’ business model generally also involves renting out space for antenna installations at these sites to mobile network operators other than Vodafone. However, this requires close coordination with Vodafone. 

In late 2021 Vantage Towers concluded an agreement with 1&1 on the co-use of a number of antenna sites in the four-digit range, a project which was to be realised in several stages until the end of 2025. Later on it was agreed to postpone the deadlines for the agreed provision of antenna sites for one year.

However, since the agreement was reached, there have been massive delays in providing the agreed sites to 1&1. Currently 1&1 is still not able to use more than a small fraction of the contractually agreed sites. In contrast to this, Vodafone has significantly expanded its own network in the years following the agreement and upgraded large parts of this network to the 5G standard, including the sites that were meant to be used by 1&1.

Using the contractually agreed sites is an essential factor for 1&1 in building up its own mobile network, a process which has now been greatly delayed. According to the Bundeskartellamt’s preliminary assessment, this development significantly impedes 1&1’s ability to compete.

In view of the severe consequences for competition in the markets affected, the Bundeskartellamt’s preliminary assessment is that Vodafone’s and Vantage Towers’ practices represent abusive conduct within the meaning of Sections 19, 20 of the German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen – GWB). According to the information currently available to the Bundeskartellamt, the companies would have been able to respond to potential difficulties in fulfilling their contractual obligations in many ways to avoid such massive delays. For example, for a certain period of time they could have concentrated the 5G upgrades for Vodafone on other sites than those intended for 1&1 and/or they could generally have concentrated more of the group’s resources on fulfilling their contractual obligations.

Upon the Bundeskartellamt’s preliminary assessment, Vodafone’s general interests make it seem plausible that a delay in fulfilling the contractual obligations was not inconvenient to Vodafone as this delayed the entry of a further competitor to the mobile communications markets and, at the same time, weakened 1&1’s position with regard to the award of frequencies by the Bundesnetzagentur.

Since late 2023 the Bundeskartellamt has been in negotiations with Vodafone regarding commitments which would have been capable of dispelling the competition concerns raised upon the authority’s preliminary assessment. However, the commitments proposed by the companies ultimately still failed to meet what they had contractually agreed to provide. The Bundeskartellamt therefore found the proposals to be on the whole unsuitable.

At the current stage, the Bundeskartellamt is considering not only determining that the conduct is anti-competitive, but also imposing an obligation to provide the relevant sites within three years and taking further measures in connection with this decision. The statement of objections outlining detailed reasons is a first intermediate step which gives the companies the opportunity to comment in detail on the authority’s preliminary assessment. A final decision on this is expected to be issued in mid-2025.