VOD Vodafone Group Plc

By Patrick Costello

--German telecoms providers have bid EUR350 million for 5G frequencies in the first two days of the auction

--Analysts expect companies will eventually bid billions of euros for frequencies

--The auction will run until companies stop submitting bids

German telecoms providers have submitted bids totaling nearly 350 million euros ($397 million) for frequencies on the 5G spectrum range, Germany's national telecoms regulator, the Federal Network Agency, said Wednesday.

Telecom providers Deutsche Telekom AG (DTE.XE), Telefonica Deutschland (O2D.XE), Vodafone Germany and United Internet AG's 1&1 Drillisch AG (DRI.XE) began submitting bids for spectrum on Tuesday at the regulator's premises in Mainz, the agency said.

Some 41 blocks of spectrum are being auctioned off in the 2 GHz and 3.4 GHz to 3.7 GHz bands. Companies are bidding for frequencies on the spectrum to build up 5G networks that will be used by consumers and industry.

As of 1030 GMT, Vodafone Group PLC's (VOD.LN) German subsidiary submitted the highest individual bid, offering to pay EUR27.5 million for a block of spectrum on the 2 GHz band in the 13th round of bidding.

The highest bid made by Deutsche Telekom--Europe's largest telecoms provider--amounted to EUR23.8 million for spectrum the 3.6 GHz block.

1&1 Drillisch AG submitted the highest set of bids overall, entering 10 bids exceeding EUR21 million during the first round of bidding alone. The company would become Germany's fourth mobile-network operator should it win spectrum at the auction.

Analysts are uncertain as to how much companies will ultimately pay for these frequencies.

"With four operators taking part, including 1&1 Drillisch for the first time, the equity market fears an irrational auction," Berenberg analyst Usman Ghazi said, noting some forecasts expect auction costs to exceed EUR8.5 billion.

Still, Berenberg said it believes auction costs could be as low as EUR3 billion.

"The only reason for high auction prices...will be a senseless strategy to block 1&1 Drillisch," Mr. Ghazi said.

Federal Network Agency President Jochen Homann said that "maximizing proceeds" isn't the agency's aim, adding that the auction allows companies to decide for themselves what these frequencies are worth.

Because the auction will end only when companies cease submitting new bids, its duration cannot be predicted, the agency said.

Write to Patrick Costello at patrick.costello@dowjones.com

(END) Dow Jones Newswires

March 20, 2019 07:28 ET (11:28 GMT)

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