Telefonica pairs up with Santander for banking 5G usecase

Telefonica Spain has announced a tie-up with Santander to launch a joint-innovation project to test out 5G applications in the banking sector.

The project will focus on three different usecases, 4K video conferencing, low latency cloud storage and virtual reality. The hope is to more readily engage customers and adapt their financial products to meet the new demands of the digital economy.

“The initiative with Santander Spain is the result of the collaboration with our corporate customers to ensure that 5G technology is deployed in a way that fully meets their needs, prioritizing the development of the most demanded capacities,” said Emilio Gayo, CEO of Telefónica Spain. “With initiatives like this we also ensure the early adoption of 5G and the positive impact on the Spanish industrial network.”

“This agreement with Telefónica responds to Santander’s commitment to innovation and to accompanying our customers in the transformation process towards the new generation of 5G communications,” said Rami Aboukhair, CEO of Santander Spain. “The new technology will allow us to have a better connectivity and faster speed of response in transactions and to offer all our customers the best experience and the best possible solutions.”

Starting with the video application, a 4K video conferencing link will be set up between two bank branches to offer ultra-high-resolution image, 4096×2160, and natural motion with zero delay. Secondly, a low latency cloud storage solution will be provided by Telefónica, based on the Hitachi Content Platform Anywhere Edge solution embedded on Telefónica’s edge computing infrastructure.

Finally, the pair will introduce co-working spaces developed in collaboration with Idronia that use Virtual Reality, 360 video and Edge Computing technologies. The aim is to offer an immersive reality service allows customers to remotely visit co-working spaces such as the Santander Work Cafe located at the Santander banking office in the centre of Madrid.

5G is being switched on in numerous locations and now it is the time to focus more heavily on the commercial side of telco. There might be some gain in offering eMBB products to both consumer and enterprise customers, but to see the promised value the telcos will have to explore new areas. European telcos might be behind other regions when it comes to engaging the verticals, but progress is being made.

Telcos complain about auction as German regulator bags €6.5bn

With 41 blocks available in the 2 GHz and 3.6 GHz bands, this spectrum auction has proved to be a busy one for Germany, but it certainly is a profitable one also.

Lasted 52 days and consisting of hundreds of different bids in what appeared to be a frustrating process, the German regulator will pocket €6.5 billion. It seems Deutsche Telekom and Vodafone were having the biggest feud, sending the total expenditure considerably north of the €3-5 billion expectation.

Sitting at the top of the pile, Deutsche Telekom spent €2.2 billion, while Vodafone contributed €1.9 billion. Telefonica spent €1.4 billion and up-start Drillisch wrote a cheque for €1.1 billion as it searches for a means to break the dominance of the three MNOs.

“Vodafone is committed to bring the full benefits of a digital society to Germany through our gigabit network including 5G,” said Vodafone Group CEO Nick Read. “We believe it is important to have a balance between the price paid for spectrum and our strong desire to create an inclusive society through investment in mobile network coverage.”

And while Read’s comments are as bland as you would expect for a press statement, there have been grumblings elsewhere over price. Deutsche Telekom has said the process has left a ‘bitter taste’.

“The network rollout in Germany has suffered a significant setback. The price could have been much lower,” said Dirk Wössner, Member of the Board of Management of Telekom Deutschland.

“Once again, the spectrum in Germany is much more expensive than in other countries. Network operators now lack the money to expand their networks. With the auction proceeds one could have built approximately 50,000 new mobile sites and close many white spots.”

Deutsche Telekom has secured 4 frequency blocks in the 2 GHz band and 9 frequency packages in the 3.6 GHz band. Vodafone on the other hand has purchased four different blocks in 2 GHz, and one continuous block of 90 MHz in the 3.6 GHz spectrum band. Telefonica collected two paired blocks in the 2 GHz band and seven unpaired blocks in 3.6 GHz.

Although Telefonica feels it can maintain its market share leadership position in mobile following this auction, it also felt the need to vent over a frustrating couple of months.

“We remain convinced that frequency allocation via auction was counterproductive for the expansion of mobile communications in Germany,” said Valentina Daiber, Chief Officer for Legal & Corporate Affairs at Telefónica Deutschland.

“The course of the auction showed that the design as well as the insufficient amount of available frequencies drove up the costs. From the consumer’s point of view and for Germany as a business location, these investment funds would be much better spent on network expansion.”

The telcos will certainly be glad they have a bit of breathing room from the auction process now, though the relationship between the regulator and industry seems to be turning very sour.

UK and Latin America gave Telefónica a steady Q1

Telefónica’s otherwise flat quarter was bolstered by strong performance in its UK and Latin America South units, which delivered 5.3% and 15.2% organic growth rates, taking the group level growth rate to 3.8%.

Telefónica reported its first-quarter results, with the total revenue at €12.611 billion, an increase of 3.8% in organic terms. This means adjustments were made to the reported numbers considering impacts of exchange rate moves, regulation and reporting standard changes, and special factors, for example adjustment made to the Argentina numbers on account of the hyper-inflation. Otherwise, the total revenue would have reported at € 11.979, or a 1.7% decline from a year ago. The quarterly operating income before depreciation and amortisation (OIBDA) reached €4.264 billion, up by 10.3%; and the net income grew by 10.6% to reach €926 million.

The Telefónica group is now serving a total of 332 million subscriber accounts (“accesses”), 6 million less than a year ago. The total mobile accesses by the end of the quarter stood at 267 million, down by 4 million from a year ago. But the good news for Telefónica is that it actually grew the contract customer base by 7.5 million over Q1 last year, meaning the loss is mainly on the pre-paid market, down by 11.5 million. It also grew its fixed broadband (including FTTx and cable) customer base by 2.1 million over the course of the year.

“The first quarter results showed a significant improvement in revenue growth trends and double-digit growth in net income and earnings per share. Strong cash generation, which was three times higher than the figure reported in the first quarter of the previous year, allowed for an acceleration in debt reduction, for the 8th consecutive quarter, further strengthening our balance sheet,” commented José María Álvarez-Pallete, Chairman and CEO of Telefónica. “We have started the year by extending our leadership in fibre and 4G deployment, testing new 5G capabilities and making progress in the UNICA virtualisation programme, allowing us to continue gaining customer relevance through better experience and higher average lifetime.”

Ángel Vilá, Chief Operating Officer of Telefónica, introduced the Q1 results and its outlook to 2019 annual outlook in more detail in the video clip at the bottom (in Spanish, with English subtitle).

While the its two biggest markets, Spain and Brazil, managed to stay stable, delivering modest organic growth of 0.3% and 1.7% respective (+0.3% and -5.2% in reported terms), Telefónica’s UK business registered a strong 5.3% organic growth to reach €1.67 billion (£1.47 billion). Excluding the exchange rate impact, the UK business would have reported a 6.6% revenue growth to reach €1.691 billion (£1.488 billion). The company is now serving 32.7 million mobile subscribers, up 2.3% over Q1 last year, which includes both customers on O2 (25.1 million) and those on the MVNOs using Telefónica networks (Sky Mobile, giffgaff, Lycamobile, and Tesco Mobile).

“This is another good set of results building on our momentum from 2018. We have delivered further revenue and customer growth underpinned by our award-winning network and market-leading loyalty,” commented Mark Evans, CEO of Telefónica UK. “We are committed to making every day better, providing customers with compelling reasons to join and stay with us through attractive propositions such as O2 Custom Plans.”

Looking across all the Telefónica markets, the UK registered the lowest churn rate of 0.9% among in its postpaid customers. In comparison, in Telefónica’s other European markets, the churn rate of contract customers was 1.6% in Germany and 1.7% in Spain. Comparable churn rates in markets like Chile and Mexico ran around 3%.

Telefónica attributed high customer loyalty, among other things, to its aggressive investment to improve its networks. The company claims it is investing equivalent to £2 million a day to strengthen its network and increase its reach.

One of O2’s focus investment areas in 2019, in addition to the planned launch of 5G, will be high density venues, including sports arenas, shopping centres, hotels, and conference centres. Already serving the Anfield Stadium in Liverpool and the Lord’s cricket ground in London with improved networks, in collaboration with the Wireless Infrastructure Group (WIG), an infrastructure company, O2 is planning to upgrade and improve its coverage and capacities in other high usage venues.

“While we look ahead to 5G we also continue to focus on our existing network capability. We strive to deliver a great network experience to all our customers, including some of the UK’s busiest locations where network demand is at its peak,” said Brendan O’Reilly, O2’s Chief Technology Officer. “Our multi-million pound investment with our partners at WIG should provide O2 customers with even better connectivity in the places they love to visit.”

Here’s more commentary from COO Ángel Vilá.

Vodafone Germany tries to placate regulators via wholesale cable deal with Telefónica

Telefónica Deutschland will be able to sell services that run on the combined Vodafone and Unitymedia cable network in Germany, as a remedy measure taken by Vodafone to satisfy EU’s competition concern over its proposed acquisition of Liberty Global.

The two companies announced that they have entered into a definite “cable wholesale agreement” in Germany, whereby Telefónica Deutschland will offer its customers broadband services that use both the Vodafone fixed network and that of Unitymedia. The combined networks cover 23.7 million households and represent a significant upgrade to whatever Telefónica Deutschland customers are currently getting.

“The cable agreement will enable us to connect millions of additional households in Germany with high-speed internet in the future,” said Markus Haas, CEO of Telefónica Deutschland. “By adding fast cable connections, we now have access to an extensive infrastructure portfolio and can offer to even more O2 customers attractive broadband products – including internet-based TV with O2 TV – for better value for money.”

Vodafone’s plan to acquire Liberty Global in Germany (where it trades under the brand Unitymedia), the Czech Republic, Hungary, and Romania, has run into difficulty at the European Union, which raised competition concerns at the end of last year. The Commission was particularly worried that the combined business would deprive the consumers in Germany of access to high speed internet access, and the OTT services carried over it. Vodafone expressed its confidence that it would be able to satisfy the Commission’s demand. Opening its fixed internet access to its competitor is clearly one of the remedies. Also included in the remedy package Vodafone submitted to the Commission was its commitment to ensure sufficient capacity is available for OTT TV distribution.

“Our deal with Liberty Global is transformational in many ways. It is a significant step towards a Gigabit society, which will enable consumers & businesses to access the world of content & digital services at high speeds. It also creates a converged national challenger in four important European countries, bringing innovation & greater choice,” said Nick Read, CEO of Vodafone Group. “We are very pleased to announce today our cable wholesale access agreement with Telefonica DE, enabling them to bring faster broadband speeds to their customers and further enhancing infrastructure competition across Germany.”

Vodafone believed the remedial measures it put in place should sufficiently reassure the Commission that competitions will not suffer after its acquisition of Liberty Global. The company now expects the Commission to undertake market testing of the remedy package it submitted, and to give the greenlight to the acquisition deal covering the four countries by July 2019. It plans to complete the transaction by the end of July. The merger between Vodafone’s and Liberty Global’s operation in The Netherlands was approved by the EU in 2016.

América Móvil strengthens its position in Brazil with Nextel acquisition

The Latin American mobile heavyweight América Móvil has agreed to acquire its competitor Nextel in the Brazilian market for $905 million.

Shortly after the deal was announced by América Móvil on Monday, and the board of NII Holdings, which owns 70% of Nextel, announced that it would propose to the shareholders to accept the offer. The other 30% of Nextel is owned by AI Brazil Holdings, the local operation of Access Industries, an American private company whose portfolio includes natural resources, telecoms, internet services, as well as Warner Music, among other media interests.

The nature of the deal, “cash free / debt free”, will let NII and AI Brazil keep all the cash while América Móvil will not assume Nextel’s debts. Although the total transaction value is less than 1.5 times of Nextel’s annual revenues in 2018 ($621 million), it represents almost four times NII’s market capitalisation on its latest trading day on NASDAQ ($229 million), indicating the buyer’s relatively strong confidence in the business prospect.

Brazil is a highly competitive market. According to research by Ovum, by Q4 2018, Vivo (owned by Telefónica) led with one third of the total mobile market, while TIM and Claro (América Móvil’s existing operation in Brazil) were vying for the second place, each serving about a quarter of the total mobile subscribers. Nextel had slightly over 1% market share. The rest of the market is served by Oi (a JV between Altice Portugal, formerly Portugal Telecom, and Telemar, Brazil’s largest integrated telecom operator).

After the acquisition, América Móvil plans to combine Nextel with Claro to “consolidate its position as one of the leading telecommunication service providers in Brazil, strengthening itsmobile network capacity, spectrum portfolio, subscriber base, coverage and quality, particularly in the cities of São Paulo and Rio de Janeiro, the main markets in Brazil.”

For NII, selling Nextel in Brazil represents the end of an era. The company once operated mobile services in multiple North and Latin American markets, including the eponymous professional radio service in the US, which was later acquired by Sprint. Brazil is its last operation, where it has been struggling in a classic four-operator market. Not only has it not been able to break into the leader group, but also seen business declining fast. The revenues in 2018 were a 29% decline from 2017 ($871 million), which itself was a 12% decline from 2016 ($985 million).

“The announcement of this transaction marks the culmination of an extensive multi-year process to pursue a strategic path for Nextel Brazil and provides our best opportunity to monetize our remaining operating assets in light of the competitive landscape in Brazil and long-term need to raise significant capital to fund business operations, debt service and capital expenditures necessary to remain competitive in the future,” said Dan Freiman, NII’s CFO. Earlier potential buyers included Telefónica Brasil, Access Industries (NII’s JV partner), though the most concrete case was TIM, which, according to Reuters, approved a non-binding offer in November last year. None of these negotiations has come to fruition.

“Management and our Board of Directors believe the transaction is in the best interest of NII’s stockholders,” Freiman added.

UK and Germany are a bit rubbish at mobile – Opensignal

A new study from mobile analytics company Opensignal notes the UK and Germany are falling behind in terms of mobile performance.

It took a look at the two operator groups that have networks in both countries and found they all deliver relatively low mobile broadband speeds in those two countries. As you can see in the charts below, Telefónica does a fair bit worse in the UK and Germany than in Spain, but maybe that’s to be expected since it’s a Spanish company. However the trend continues with Vodafone, for which the UK and Germany are two of its worst performers.

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opensignal vodafone

“So what’s the reason for these relatively poor mobile broadband speeds in Germany and the U.K.?” said Opensignal Analyst Peter Boyland. “It certainly isn’t market maturity or competition, as both countries have had mobile networks for decades and levels of competition, numbers of operators, etc. are comparable with their neighbours.

“Topographically, both countries have challenges in terms of size and population density, but no more than, say, Italy or Spain. It would be easy to blame poor performance on underinvestment in network infrastructure, but the reality is a combination of many factors including regulation, availability of spectrum, and mergers and acquisitions among network operators.

“The fact remains that Germany and the U.K. are punching well under their weight in terms of mobile network speeds. Both countries are on the verge of 5G launches, but it is likely to be some years before the benefits of these new networks are felt by most mobile users. And there is growing discontent among the business community in Germany, with claims that poor broadband speeds are hindering economic growth. Germany and the U.K. may not be able to wait for the 5G opportunity, as their operators urgently need to make improvements in their mobile network experience today.”

Something’s certainly going on when two major operator groups can only manage around half the performance in the UK and Germany as they can in their leading markets. As Boyland said this situation will be the product of a number of factors, but our gut-feel is that regulation and spectrum availability are probably the most significant of them.

Telefónica and Microsoft team-up to own connected ecosystem

Every telco is attempting to figure out how to survive in the newly-defined digital world and Telefónica’s approach looks to be one of the most interesting attempts yet.

Speaking at Mobile World Congress in Barcelona, Telefónica CEO Jose Maria Alvarez-Pallete was joined on stage by Microsoft CEO Satya Nadella to preach the promise of its ‘fourth platform’ and the power of digital assistant ‘Aura’ as a play to capture the fortunes of tomorrow’s digital ecosystem. Many are attempting to realise the glories of the connected economy, but this approach, leaning on the ‘gated community’ lessons of the OTTs looks to be one of the most encouraging yet.

“We decided cognitive intelligence was an amazing new opportunity,” said Alvarez-Pallete. “It is a new wave of interaction with our customers.”

The idea, which has been in the making for the last two years, is a relatively simple one on the surface. Build an effective digital assistant (tick), an intuitive interface (tick), a network designed for intelligence (tick) and open all this up to third parties (the next tick). It is remarkably similar to the ‘gated community’ model which has been championed by the likes of Facebook.

Although there are services and products which will be designed by Telefónica, there are more intelligent ways to monetize the consumer. The digital assistant and ‘Movistar Living App’ help Telefónica own the relationship with the consumer, but by opening the gates of this cultivated community Telefónica can monetize the relationships and (in-directly) the services which are build on top of its own intelligent network.

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However, for this idea to work the services have to be captivating and innovative. Telefonica must give customers a reason to use ‘Aura’ and the ‘Movistar Living App’ as the focal point of their own connected world. Effectively, Telefonica will have to go head-to-head with the likes of AWS and Google who are also trying to own this relationship with their own digital assistants. This is where Microsoft will be able to help.

Under Nadella, Microsoft has been reborn as a new company. After a brief fall from grace, the now cloud-defined business is fast becoming one of the most innovative players in the market, and part of this is built on its own AI platform and cognitive intelligence offerings. If Telefonica is going to go toe-to-toe with some very innovative players and own the connected ecosystem, the power of Azure (machine learning research, speech recognition etc.) will be critical to this success.

Another crucially important factor to success here will be earning, and maintaining, customer trust. Facebook succeeded so forcefully in the first few years because no-one questioned the data-sharing business model. Perhaps this was because no-one could understand these concepts, but the world has changed. Privacy is a priority for consumers, and Telefonica will have to prove it is serious about keeping personal information safe and managing the relationships with third-parties responsibly. Without this trust, Telefonica’s drive towards evolution with fail and the business will be nothing more than a dumb pipe.

rhdr

What is worth noting is that the strategy is off to the best possible start. Aura has been launched in six different countries, across 30 channels and has developed more than 1000 different usecases. By the end of 2019, these numbers will have improved to 9, 50 and 1500 respectively. The ambition and the growth potential is certainly there.

Owning the ecosystem which is fast developing behind the connected economy, including the smart home, is an opportunity which looked to be lost for the telcos. With the likes of AWS and Google seemingly wrestling control away with their own smart speakers and integrated personal assistants, it might have been a case of another missed opportunity due to inaction. Telefonica is looking to right this wrong however.

O2 confirms 2019 5G launch

Telefonica’s UK business O2 has confirmed it will launch 5G in 2019, though there will be much more of a business twist to the new connected euphoria.

Mixed in with the management team reporting financial results for the last twelve months, the team announced the network upgrade, which will be fuelled by a £1 billion CAPEX investment over 2019. What is worth noting is the O2 management is pitching 5G with more of a business facade than competitors are offering.

Although specific dates have not been revealed, the network will first launch in Belfast, Cardiff, Edinburgh and London, while the rollout will continue throughout the rest of the UK through 2020, as compatible smartphones become more readily available.

“Mobile is one of the most powerful opportunities for growth in the economy and 5G is just the next step,” said COO Derek McManus. “We’re building a 5G economy is coalition with British business.”

What is not entirely clear is how much of this £1 billion investment will be directed towards 5G and what will be left over for the 4G network. O2 has been investing healthily in its network over the last couple of months, CAPEX investments in 2018 accounted for 12.9% of total revenues, and CEO Mark Evans expects this to continue.

According to Evans, 5G will not be forced on consumers once launched, but there will naturally be early adopters queuing up. Selling 5G to the consumer is going to be a tricky task for many telcos, 4G is arguably fast enough for all available applications and services, and to ensure O2 is generating ROI, the enterprise world is going to be a focus for the team.

This is not necessarily out of character for the telco either. Over the last couple of months, O2 has been targeting enterprise for growth, perhaps realising fortunes are not going to be realised in the consumer segment. As the market leader, O2 now has 32.6 million connections on its network (including MVNOs) and the expense of artificially attempting to force future growth might exceed the benefit. Growing in the enterprise market, while maintaining a leadership position in the consumer world, is certainly a sensible strategy.

“The company is taking a cautious wait and see approach to 5G,” said independent analyst Paolo Pescatore. “However, it can’t afford to be left behind. It is apparent that initial consumer appetite for 5G will be limited. A greater focus on enterprises is a sensible approach.”

Over the last couple of months, O2 has been running its FTSE 100 5G testbed to identify the usecases which mean the most to British business. Although McManus was not forthcoming on specific partners and customers, he did suggest there was strong progress being made in the agriculture, retail, transport and industrial segments. O2 will certainly not turn away any consumers who want to upgrade to 5G, but there does seem to be much more of a business twist to the super-charged network plans than we’re seeing at other UK telcos.

That said, while there is certainly a stronger focus on business, fixed wireless access seemingly has not been ruled out as a 5G usecase, potentially opening the door for a convergence offering. Evans pointed out that there would certainly be customers who would use the 5G connectivity for FWA but stopped short of completely ruling out this type of service from O2.

According to both Evans and McManus, FWA can make sense in some circumstances, take rural locations as an example, but long-term there are better options. With the country being fibred up, FWA as 5G validation is weak.

Moving over to the financial results, there are certainly some healthy numbers here. Total revenues for the last twelve months went just past £6 billion, a 5.4% year-on-year increase, while operating income was £1.6 billion, a 11.8% boost in comparison to 2017. O2’s subscription base grew to 25 million, with the total of 32.6 million including MVNOs such as Tesco Mobile, Sky Mobile and Lycamobile, as well as its own sub-brand Giffgaff.

CFO Patricia Cobian pointed towards increased data consumption and the introduction of three new offers as fuel for the positive results. In Q1, O2 updated its roaming plans to include the US and Australia (amongst other countries), while in Q2 the team launched a family plan and in Q3 Custom Plan debuted, allowing customers to decide how they pay for subsidized devices. With net additions standing at 282,000 across 2018 and churn below 1%, the offers certainly seem to be having a positive impact.

The Priority initiative has once again proved successful for the business. Some might feel this is a card which is underplayed by the O2 team, but customers certainly enjoy it. Over 8 million Priority offers accepted across the year, 42 million entries made to prize draws and £26.7 million saved in offers and freebies.

In terms of value adds, O2 is doing a great job in rewarding customers but limiting its own exposure. For example, the Telefonica parent group has relationships in place all around the world to fuel the roaming offer, the custom plans make few changes to revenues and the Priority initiative is more about connecting two parties, rather than a big financial outlay. BT has tried to add value by spending billions on TV content, but O2 is using current assets in an intelligent way to create value for customers and partners.

O2 isn’t changing the world with these results, but the UK is a relatively sedate telco market. That said, the telco is in a very healthy position moving forward. With a sensible touch crafting a business visage to 5G, a loyal customer base and big investment plans, O2 will not be easily giving up its leadership position.

Telefonica and Seat get the MWC wheels turning

Telefonica is fuelling the hype as we motor towards MWC with connected car announcements alongside Spanish automotive giant Seat.

In an early effort to drive traffic towards its stand, Telefonica has carpooled with Seat to give the green light to three new innovations in the connected vehicles race. While there are sceptics who would want to curb autonomous vehicles enthusiasm, the duo is racing towards a happy middle-ground with three assisted driving use cases.

Firstly, the team will introduce pedestrian detection capabilities, which will allow traffic lights to sense the presence of pedestrians with thermal cameras, before relaying this information onto cars in the nearby area. Display panels will be able to inform the driver of potential risks on the road.

Secondly, connected bicycles equipped with a precise geolocation will notify vehicles in the area when the rider decides to turn right. The bikes will be detected by ultra-wideband beacons placed along the road, and should there be a risk of collision, the driver in the car will once again be notified.

While both these ideas will be powered by edge-computing, the final usecase will rely on direct communication interface. Should visibility be particularly low, stationary vehicles would detect moving vehicles, emergency lights would be turned on while the driver would, again, be notified on the display board.

These usecases might not be on the same level as the glories of autonomous vehicles, but there is a satisfactory amount of realism on display. Autonomous vehicles are not going to be on our roads for a long-time, and while that does not mean we should not continue to fine tune the technology, there has to be a focus on improving road safety today. This is exactly what is being done here.

Another similar concept is being developed in MIT. Here, an AI application analyses the way pedestrians are walking to understand whether there might be any risks. This sort of analysis is something we all do subconsciously, but a very useful and important addition to the connected car mix.

Using lidar and stereo camera systems, the AI estimates direction and pace, but also takes pose and gait into consideration. Pose and gait not only inform the pace and direction, but also give clues to future intentions. For instance, if someone is glancing over their shoulder, it could be an indication they are about to step into the road.

Looking further into the future, when autonomous taxis might be a real thing, this could also be incredibly useful. Of course, the simplest way to hail a taxi in this futuristic age will be through an app, but if the vehicle can see and understand an outstretched arm is a signal for a taxi, it would be a useful skill to incorporate into the AI.

All of these ideas are not only relevant for the long-term ambitions of the automotive industry but also very applicable today. Connectivity and AI can be incredibly beneficial for human-operated vehicles, especially with the advancements of edge-computing and leaning on the high bandwidth provided by 5G. Not everything has to be super-futuristic, and it’s nice to see a bit of realism.

Germany’s 5G auction has not got off to a flying start

Telefónica Deutschland has filed an urgent appeal against the country’s 5G auction terms. Deutsche Telekom may follow suit.

Telefónica Deutschland was seeking to halt the country’s 5G auction by filing an appeal for injunction at an administrative court in Cologne on Tuesday 5 February. Germany was scheduled to hold the 5G auction by the end of March and was expecting to raise up to €5 billion. The key items on the terms issued by the Federal Network Agency being contested are concerning the coverage requirements, especially the coverage in rural areas and along motorways, and the mandated network sharing with competitors (the so-called domestic roaming).

Telefónica Deutschland argued that the coverage obligations could not be fulfilled with the spectrum at auction, while the frequency in its possession is already being used by other expansion requirements.

“This legal uncertainty is extremely unhelpful for the necessary massive investments in future network expansion. Billions in 5G cannot be invested on the basis of unclear rules. It must be in the interest of all involved that clarity and planning security are created here before an auction,” said Markus Haas, CEO of Telefónica Deutschland.

Telefónica was also unhappy that politicians should demand network sharing between competitors. “We have already invested €20 billion in infrastructure in Germany. We have always said that we will continue to invest if the conditions are right,” Haas told the German publication Handelsblatt late last year. However, as a condition to approve its merger with E-Plus in 2014, EU regulators already required Telefónica to make 30 percent of its capacity available to MVNOs, in this case 1&1 Drillisch.

Meanwhile Telefónica insisted that even if there would be a delay in the auction, “this would not have any influence on a large-scale launch of 5G in Germany. This is because the spectrum available for auction for this purpose will not be allocated to the successful participants until the end of 2020 anyway,” the company said in a statement.

Deutsche Telekom may also consider its position differently now. It first told Handelsblatt “we have not yet made an urgent request, to avoid delaying the auction schedule.” But in light of the new appeal from Telefónica, “we are therefore examining all legal options,” the spokesperson added.

It is not the first time the telcos have resorted to legal measures. By the end of December, Deutsche Telekom, Vodafone, Telefónica, as well as the challengers United Internet and Freenet had all filed lawsuits against the government’s rules over the upcoming auction, but none was successful in halting the process.

Deutsche Telekom, Vodafone, Telefónica, and United Internet (trading as “1&1 Drillisch”) filed applications before the deadline of 25 January to participate in the upcoming 5G auction.