Major regulatory decisions

Our business activities are largely subject to national, European, and U.S. regulation, which is associated with extensive powers to intervene in our product design and pricing, particularly in Europe. We were again subject to extensive regulation in our mobile and fixed-network businesses in 2020.

Regulation

Amendment of telecommunications laws in the European Union. The Federal Cabinet of Germany (Bundeskabinett) approved the draft for the amendment of the German Telecommunications Act (Telekommunikationsgesetz, TKG) on December 16, 2020. The amendment is necessary in order to transpose European requirements from the European Electronic Communications Code into national law. The biggest changes affect consumer protection regulations, the regulation of “very high capacity networks” (including FTTH), spectrum regulation, and the regulations on universal service. In view of the Code’s implementation deadlines, the amended Act should have been published by the end of 2020 at the latest. The need for further readings in the legislative process delayed the publication of the Act. It is now expected in the first half of 2021. The Code is also being transposed into national law in the countries of our European subsidiaries. In some, this process was completed by the end of 2020, whereas in others implementation will take until 2021.

Roaming regulation. The European Commission launched a consultation procedure on the future regulation of international roaming in summer 2020. The current regulation applies price caps through 2022 on the roaming charges that European mobile network operators can bill peer operators for the use of roaming services. In addition to the future regulation of these charges, the Commission also consulted on whether and which rules will apply in the future to roaming for the Internet of Things (IoT) and to roaming access to value-added services and emergency call numbers.

European Commission sets termination rates from 2021. On December 18, 2020, the European Commission published a Delegated Act setting single maximum Union-wide mobile (MTR) and fixed-network (FTR) termination rates. The Commission proposes a phased reduction of MTRs to a uniform level of 0.2 eurocents/min. by 2024. FTRs are to be reduced sooner, to 0.07 eurocents/min. EU-wide by 2022. The Delegated Act is expected to enter into force in the first half of 2021; from the date of effect, member states will have a transition period of two months to apply the price caps contained in the Act.

Awarding of spectrum

T‑Mobile US successfully bid on total spectrum of 691 MHz at the U.S. auction in March 2020 and received the 5G licenses it bought for USD 873 million in April 2020. A further CBRS auction in the United States for spectrum in the 3,550 to 3,650 MHz band ended on August 25, 2020. T‑Mobile US secured eight licenses for which it paid a net sum of USD 6 million. The C-band auction for spectrum in the 3,700 to 4,200 MHz band began on December 8, 2020 and ended on January 15, 2021. The spectrum assignment phase, however, is still ongoing. T‑Mobile US was one of 57 auction participants.

In Europe, Deutsche Telekom and its subsidiaries received the following spectrum up to the end of 2020: Magyar Telekom in Hungary was assigned spectrum in the 700; 2,100; 2,600; and 3,400 to 3,800 MHz bands (totaling 160 MHz) in April 2020, which it had previously acquired at auction for EUR 152 million (when translated into euros). In the Netherlands, an auction started on June 29, 2020 for spectrum in the 700; 1,500; and 2,100 MHz bands. The auction ended with the completion of the allotment phase on July 21, 2020. T‑Mobile Netherlands successfully bid on a total spectrum of 70 MHz in all three bands for an aggregate amount of EUR 400 million. In Austria the auction for spectrum in the 700; 1,500; and 2,100 MHz bands ended on September 11, 2020. T‑Mobile Austria acquired total spectrum of 100 MHz in all three bands for EUR 89 million. In Greece, spectrum was awarded in the 700; 2,100; 3,400 to 3,800 MHz; and 26,000 MHz bands in the fourth quarter of 2020. Given that the market’s three only active network operators took part in the award proceedings and that no scarcity of spectrum arose in the 700; 2,100; and 26,000 MHz bands, it was possible to assign the volumes in question without the need for auction. The second auction phase ended on December 16, 2020 for 90 MHz of available spectrum in the 3,400 to 3,800 MHz band. OTE’s subsidiary Cosmote received total spectrum worth EUR 110 million in the first phase followed by spectrum worth around EUR 14 million in the second phase. Slovakia successfully concluded its auction for the 700, 900, and 1,800 MHz bands in November 2020, with Slovak Telekom acquiring spectrum for a total sum of EUR 33 million. In the Czech Republic, the auction that had been rescheduled on account of coronavirus for the 700 MHz and 3,400 to 3,600 MHz bands was also held in November 2020. T‑Mobile Czech Republic secured spectrum worth EUR 72 million (when translated into euros).

In Hungary, proceedings to re-award 900 and 1,800 MHz spectrum licenses that are due to expire in 2022 were held on January 28, 2021 and concluded the same day. Magyar Telekom acquired 2x 8 MHz and 2x 20 MHz in the respective bands for a total price of EUR 123 million (when translated into euros). While Poland has made no further announcements regarding a new start date for the postponed auction for 3,400 to 3,800 MHz, it is expected the auction will be held in 2021. Croatia plans to award the 700 MHz and 3,400 to 3,800 MHz bands and possibly further spectrum in the first half of 2021. Romania is set to auction spectrum in the 700; 800; 1,500; 2,600; and 3,400 to 3,800 MHz ranges in the second half of 2021. In Slovakia the 3,400 to 3,800 MHz band is expected to be allocated in 2021.

The following table provides an overview of the main ongoing and planned spectrum awards and auctions as well as license extensions. It also indicates spectrum to be awarded in the near future in various countries.