Deutsche Telekom shares are lower Monday, as the German telecoms business has agreed to share its fibre-optic infrastructure with the German arm of Telefonica, ahead of the Germany’s upcoming 5G license auctions. The deal won’t just benefit Telefonica, but also help to reduce costs for Deutsche Telekom.
By 1240 BST, Deutsche Telekom shares were 0.21% lower at €13.98. The stock has been moving in broadly positive territory in recent weeks.
Deutsche Telekom deal details
The agreement between the two business, will see at least 5,000 Telefonica Deutschland mobile base stations, connected to Deutsche Telekom’s existing fibre-optic infrastructure network. The move should support both firms as the German licensing round for the 5G network upgrade moves closer.
“This agreement is an important step toward ensuring the future viability of Germany's mobile communications infrastructure,” said Dirk Wössner, Managing Director of Telekom Deutschland.
“Everyone will win from this cooperation, because Deutsche Telekom and Telefónica can both capture synergies. The resources that we save will be dedicated directly to our own network upgrades and the development of 5G,” Wössner said.
Telefonica Deutschland was also positive on the new agreement.
“By using the available infrastructure, we can accelerate the expansion of our mobile network and get a significant portion of our mobile base stations in shape for the future 5G standard,” said Telefónica Deutschland’s CEO, Markus Haas. “As a result, our customers will benefit directly from a more powerful mobile network and a better user experience.”
German 5G auction
This latest deal between the two telecoms businesses, extends previous partnerships. Coming ahead of the 5G licensing auctions, it also helps both firms save costs as they prepare to bid for their part in the latest network upgrade.
The 5G auction will be conducted in Germany in early 2019. While there are concerns over the exact, final terms that will be imposed, this deal should place both firms in a good position, as the German regulators work to ensure 5G coverage across the country is a broad-based as possible.