German telecommunications regulator the Bundeskartellamt has accused Vodafone Group and its partially owned towers subsidiary Vantage Towers of abusive anti-competitive conduct towards the country's fourth mobile operator 1&1.
The Bundeskartellamt has sent Vodafone and Vantage Towers a preliminary legal assessment relating to perceived shortcomings in providing antenna sites to 1&1.
Vantage Towers had contractually agreed to provide the sites in 2021, but Bundeskartellamt alleges massive delays in provisioning have occurred since then.
“Based on the findings to date, the delay in the contractually agreed provision of sites is to be considered an anti-competitive impediment to 1&1’s market entry as a fourth network operator," Andreas Mundt, President of the Bundeskartellamt said.
"According to the information available to us at this stage, the delay and its negative effects on competition in the relevant markets could, and in view of the prohibition of abusive practices under competition law, should indeed have been avoided.
"At the current stage we are considering using our powers as a competition authority to enforce the provision of the sites which have not yet been made available.”
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Vantage Towers, which markets and manages approximately 20,000 antenna sites in Germany, is Vodafone Group’s former radio mast division, and is now jointly controlled by Vodafone Group and two financial investors.
The Vantage Towers antenna sites are used by Vodafone as the main lessee and are thus an essential part of Vodafone’s German mobile network.
Vantage Towers’ business model generally also involves renting out space for antenna installations at these sites to mobile network operators other than Vodafone.
However, the regulator says this requires close coordination with Vodafone.
In late 2021 Vantage Towers concluded an agreement with 1&1 on the co-use of a number of antenna sites in the four-digit range.
However, since the agreement was reached, the regulator says there have been "massive delays" in providing the agreed sites to 1&1 and 1&1 is still not able to use more than a small fraction of the contractually agreed sites.
In contrast to this, the regulator points out that Vodafone has significantly expanded its own network in the years following the agreement and upgraded large parts of its network to 5G, including the sites that were meant to be used by 1&1.
According to the Bundeskartellamt’s preliminary assessment, this significantly impedes 1&1’s ability to compete, and has severe consequences for competition in the markets affected.
The Bundeskartellamt’s preliminary assessment is that Vodafone’s and Vantage Towers’ practices represent abusive conduct within the German Competition Act.
According to the Bundeskartellamt, the allegedly offending companies could have concentrated the 5G upgrades for Vodafone on other sites than those intended for 1&1 and could generally have concentrated more of the group’s resources on fulfilling their contractual obligations.
The Bundeskartellamt also pointed out that Vodafone benefited from the delays imposed on 1&1.
"Vodafone’s general interests make it seem plausible that a delay in fulfilling the contractual obligations was not inconvenient to Vodafone as this delayed the entry of a further competitor to the mobile communications markets and, at the same time, weakened 1&1’s position with regard to the award of frequencies by the Bundesnetzagentur."
The Bundeskartellamt is considering not only determining that the conduct is anti-competitive, but also imposing an obligation to provide the relevant sites within three years and taking further measures in connection with this decision.
A final decision on this is expected to be issued in mid-2025.