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Mobile Phone Network Expansion in Sparsely Populated Regions in Germany: Roaming Benefits Consumers

DIW Weekly Report 19/20/21 / 2021, S. 137-144

Pio Baake, Kay Mitusch

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As part of the 2019 frequency allocation process for mobile communications, the Federal Network Agency required network providers to achieve a certain level of mobile network coverage for the population. Cooperation between different network providers was also permitted for the first time, although it was not specified what forms of cooperation are permitted. Using a model, this report shows that providers can save money by sharing network infrastructure. However, this causes the overall network coverage to decrease unless the regulatory guidelines are modified. One way to increase network coverage while simultaneously benefiting consumers would be to implement international roaming regulations nationally: Network providers may use other networks to transmit data and calls, but may not use them as a basis for contracting with consumers. Overall, given minimum coverage obligations, both consumers and network providers can benefit from cooperation between providers. This also holds true for territorial agreements between providers as long as it is ensured that the required level of coverage is achieved.

Pio Baake

Research Director Regulation in the Firms and Markets Department

JEL-Classification: L13;L96
Keywords: Network Sharing, Cooperations

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