On October 18, the BNetzA (Bundesnetzagentur), the German telecommunications regulator, sided with Transatel in its regulatory dispute with mobile operator Telefónica Germany[1]. BNetzA requires Telefónica to negotiate an MVNO (Mobile Virtual Network Operator) access contract with Transatel so that its cellular connectivity services dedicated to the Internet of Things (IoT) are available in Germany.
The German regulator considered that mobile operators should comply with their obligation to negotiate MVNO access agreements, in accordance with the 5G frequencies allocation obligations. Telefónica Germany was still refusing to open discussions with Transatel.
“The German market is overall not very competitive. There are only 3 mobile operators that are blocking the market and hampering the entry of new players. For several years, German operators have sought to hinder Transatel’s development, which had succeeded in winning major contracts against them with companies such as Airbus, Stellantis (ex FCA) and Jaguar Land Rover. Note that these operators enjoy great freedom to market their services across Europe, which obviously poses a problem of fairness. We are therefore extremely happy that the BNetzA has proved us right, despite the lobbying of the 3 German operators with their national regulator. We hope that this decision will finally allow us to initiate a constructive dialogue with Telefónica and that it will contribute to further open up the telecoms market in Germany as well as accelerate the development of the IoT market in Europe” says Jacques BONIFAY, CEO of Transatel who is delighted to see European principles prevail.
Transatel wins its second victory amid resistance from German mobile operators to respect European competition principles.
In 2018, Transatel had already won its case with the BNetzA (Bundesnetzagentur) during a dispute settlement relating to compliance with the European roaming directive[2]. Although condemned, Telefónica had indeed started negotiations, but its disproportionate demands had forced Transatel to give up. Transatel finally obtained a 4G roaming agreement with Deutsche Telekom last March.
This new BNetzA decision comes at the same time as another decision by the German Federal Administrative Court in which Telefónica was curtly dismissed in an application to cancel German operators’ obligations regarding the allocation of 5G licenses. The Federal Administrative Court has also highlighted a possible influence of the German government on the telecoms regulator when the latter is supposed to remain completely independent[3]. Last August, The European Court of Justice has also called out Germany’s energy regulator, the Bundesnetzagentur, for a lack of independence and impartiality[4].
“In Europe, Germany is the most closed market in terms of telecommunications. This phenomenon weakens European competitiveness in the strategic sector of the Internet of Things and is detrimental to European consumers. It is regrettable to see systematic opposition of German operators to any external competition while it is critical to ensure that our European internal market maintains its fluidity and competitiveness. It is essential to allow all European Internet of Things players to achieve critical size to compete with their American and Chinese counterparts.” adds Jacques BONIFAY, also President of MVNO Europe[5] where he actively defends alternative mobile operators’ interests with governments and European institutions.
Facing the hostile attitude of national operators hindering its development on the German market, Transatel had to carry out intense lobbying activities with the European Commission for the past 5 years. Jacques BONIFAY thus met with Mr Thierry BRETON (Commissioner for the Internal Market) and Mrs Margrethe VESTAGER (Executive Vice-President of the Commission and Commissioner in charge of competition) on several occasions to ensure that European principles prevail. This effort will undoubtedly have weighed in the decision-making of the BNetzA.
Transatel is the first non-German player to win a case against one of the three big German operators, and one of the few alternative operators. A victory which once again demonstrates its mastery of international regulatory issues, particularly in Germany.