State aid: Commission approves €2.1 billion German scheme to support roll-out of infrastructure for high speed mobile communication services in underserved areas in Germany

(Source: European Commission)

The European Commission has approved, under EU State aid rules, a €2.1 billion German aid scheme to support the deployment, operation, and granting of access to high performance mobile infrastructure in areas served only with 2G networks and below.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €2.1 billion scheme will enable the provision of high-performance mobile services to citizens. It will bring about significant mobile network capacity and availability in currently underserved areas in Germany. All mobile network operators will obtain access to the infrastructure on equal terms, so the scheme will foster competition to the benefit of consumers. It will bridge a digital divide, reduce inequalities and ensure seamless communication. We have worked closely with German authorities to enable public money being channelled into areas that are most in need of better connectivity, in line with the EU’s ambition to achieve performant mobile voice and data connectivity everywhere in Europe.”

The scheme notified by Germany will support the provision of high-performance mobile services based on Long Term Evolution (LTE – a 4G mobile communications standard) technology and newer mobile network technology generations, including 5G, which will enable high-speed internet connections.

The scheme will be implemented by the newly established and state-owned Mobilfunkinfrastrukturgesellschaft mbH. The public support will take the form of grants to companies that build and operate the passive infrastructure for voice and mobile data services (masts, ducts, dark fibre). Beneficiaries may include mobile network operators, specialised construction companies and fibre optic companies.

Public support will be given only for infrastructure in areas where (i) mobile networks have not been deployed or (ii) where only mobile networks capable of supporting 2G mobile services and below are available and where no private operator plans to deploy 4G mobile networks and above in the near future.

The beneficiaries will be selected through an open, transparent and non-discriminatory competitive procedure. Furthermore, they will have to offer access to the passive mobile infrastructure to all interested mobile network operators on fair, open and non-discriminatory terms.

The deployed passive mobile infrastructure and the mobile services provided using such infrastructure will not be taken into account for any current or future coverage obligations for mobile network operators under spectrum licence use rights.

The Commission assessed the scheme under EU State aid rules, in particular under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) and by applying the principles set out in the Commission’s 2013 Broadband Guidelines. The Commission found that the scheme has an incentive effect to further develop the deployment and operation of passive mobile infrastructure for the provision of high-performance mobile services in the target areas in a manner that promotes connectivity. The Commission further noted that the scheme contributes to addressing a market failure in sparsely populated and topographically difficult areas of Germany.

The Commission recognised that coverage obligations for mobile network operators resulting from radio spectrum usage rights, according to which mobile network operators have to cover a certain share of the population with their mobile networks, will not provide full geographical coverage of the German territory and that therefore the aid is needed in order to achieve this objective. The aid was also found to be proportional considering that the market has been consulted on the scheme in advance and that interested parties will be further consulted on all potential target areas and given the opportunity to notify their investment plans. In particular, the Commission considered that this measure will lead to a step change in terms of provision of mobile services in the target areas, that the principle of technological neutrality is respected and that fair, open and non-discriminatory access to the supported passive mobile infrastructure will be ensured.

On this basis, the Commission concluded that the scheme is in line with EU State aid rules, and contributes to the EU’s strategic objectives set out in the Communication “Towards a European Gigabit Society”. At the same time, the scheme will help reduce important inequalities and the digital divide in Germany.

Background

The EU has expressed in its Gigabit Communication the wider ambition that there should be access to mobile data connectivity throughout the EU territory, in all places where people live, work, travel and gather, including in remote areas. The 2030 Digital Compass builds on that and proposes that by 2030 all European populated areas should be covered by 5G. The European Electronic Communications Code also identifies the general objective of promoting connectivity and access to, and take-up of very high capacity networks, including mobile networks, by all citizens and businesses of the Union.

The performance of mobile communications technologies is developing so rapidly that they have become key technologies for the digital transformation in business and society. However, currently mobile network coverage does not meet everywhere the continuously growing expectations of business and society. Apart from existing mobile network coverage gaps, frequent disrupting disconnections, as well as capacity and speed limitations, reduce the user experience. In order to achieve the benefits of the Gigabit society, mobile services should be available everywhere – in households and for businesses, on roads, railways, waterways and tourist attractions as well as on agricultural areas. Thereby the provision of mobile services has to guarantee unrestricted mobility of users.

The non-confidential version of the current decision will be made available under the case number SA.59574 in the State Aid Register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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