German newcomer slashes investor payout to fund 5G - Mobile World Live

German newcomer slashes investor payout to fund 5G

21 MAY 2019

Operator 1&1 Drillisch unveiled a plan to dramatically cut dividend payments for its latest fiscal year if it secures allocations in Germany’s ongoing 5G auction, which has lasted for more than two months and attracted bids worth almost €6 billion.

In a proposal set to be presented to shareholders at its AGM today (21 May), the company said it would require additional investment should it secure frequencies in the auction.

Assuming shareholders approve the plan and it has winning bids in the ongoing sale, the dividend would reduce from €1.80 to €0.05 per share. The cut would save 1&1 Drillisch €308 million in investor payments.

If the company acquires spectrum it will become the country’s fourth mobile operator. It already runs an MVNO, with parent United Internet providing fixed and internet services in Germany.

Prices in Germany’s 5G auction continue to rise steadily.

As of the end of the round 378 of bidding, German authorities stand to make €5.93 billion from the sale of spectrum licences suitable for 5G with Deutsche Telekom, Vodafone Germany, Telefonica Deutschland and 1&1 Drillisch all set to win allocations.

The process started on 19 March following months of wrangling and controversy over the terms slapped on the rollout of 5G networks.

In late March, Deutsche Telekom CEO Timotheus Hoettges slammed the policies accompanying the sale of 5G frequencies, stating the reservation of a quarter of the allocation for private industry would artificially raise prices paid by operators for the remainder.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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