"We would be ready to offer 5G at every milk can"

Telefónica recently had to switch to crisis mode. Voice telephony was disrupted in the O2 network for several hours. For Telefónica Deutschland boss Markus Haas, the failure is inconvenient. In the coming week he has to explain to the Advisory Board of the Federal Network Agency how many gaps his network still has - and whether he will achieve the expansion goals to which he has committed himself.

WELT AM SONNTAG: Mr. Haas, be honest: Would you dare to conduct this interview from a moving train using your smartphone?

Markus Haas: By phone? Without a doubt. Via the data network also on the main routes, for example between Munich and Frankfurt or also to Berlin. We have solid network quality on the train. I would be more careful with the regional trains. As an industry, we are not yet where we want to be.

WELT AM SONNTAG: The year will end in just over a month, and with it the deadline for the expansion targets for the mobile communications networks that were set by the Federal Network Agency. In the summer, a paper from the authority said that Telefónica was again a laggard in the industry comparison.

Haas: We achieve the goals. We submitted the data for this to the network agency last week. We are on the home straight with speeds of 100 megabits per second in the federal states. We fulfilled the 5G expansion requirement in the last remaining federal state last week.

WELT AM SONNTAG: When will the last radio hole in Germany be closed?

Haas: We want to have full area coverage by the end of 2024. Joint expansion with our competitors also helps here. In the large white spots, we grant each other access to the cell phone masts.

WELT AM SONNTAG: What about the resilience of the networks in Germany? You just had a major failure.

Haas: The nets are very resilient and also safe. We invest a lot of money here, both in cyber security and in physical security. I was very upset about the failure. When a stronger power line was laid, a chain reaction ensued. That should not happen. We analyze that carefully. But fortunately, that happens extremely rarely. Our last major outage was eight years ago.

WELT AM SONNTAG: Like your competitors, you still have a lot of technology from the Chinese supplier Huawei installed in your network. Critics see this as a security risk.

Haas: Critical components must be certified by the Federal Office for Information Security. However, no network supplier has gone through the entire process in an open and transparent manner. We expect all manufacturers to meet these criteria. In the end, this is also a political decision.

WELT AM SONNTAG: Why don't you just do without Huawei?

Haas: From a technical point of view there is no reason for it at all, because there are no indications of security flaws. We have to make our decisions based on facts.

WELT AM SONNTAG: Fears are growing that our power grids will become unstable in winter. Are you prepared for a power outage?

Haas: We always have protection against power failures at the nodes of our networks, mostly diesel generators. But our use is very decentralized. We have 20 such nodes and around 30,000 antenna sites. We do not expect a large-scale power failure. Nevertheless, we are examining how we can save even more energy. For example, we look at whether we have to run all frequency bands completely at night when the network load is 95 percent lower. We are currently discussing this with the Federal Network Agency. We see an energy saving potential of up to 25 percent here.

WELT AM SONNTAG: Then the mobile Internet will be slower at night?

Haas: The customer will not notice anything. The available speed is shared among far fewer customers at night. But it's not just about speed, it's also about capacity. If only two people surf at night on Marienplatz in Munich, some of the antennas could go into standby mode to save electricity. If demand increases, the output could be automatically ramped up again.

WELT AM SONNTAG: In the past you have repeatedly complained that too little money is available for network expansion due to expensive frequency auctions. However, the Monopolies Commission sees no connection here. Maybe you just want to get the frequencies cheaply?

Haas: If we look at this at the European level, one thing is certain: the countries with the lowest frequency costs have by far the best network quality. Look at Sweden, Norway, Finland or Switzerland. And in these countries there is the same intensity of competition as in Germany. We do not share the conclusion of the Monopolies Commission. In Germany, the Federal Network Agency has the legal option, even in the event of a shortage, to extend frequency rights instead of auctioning them off. This is the better way.

WELT AM SONNTAG: What would you offer in return?

Haas: We would be willing to offer 5G at the milk can, i.e. to upgrade every station with 5G across the board and have it available everywhere. This is our offer.

WELT AM SONNTAG: After previous experience with dead spots in Germany, why should you get involved?

Haas: The reasons for this were expensive frequency auctions and very long approval periods for antenna sites. If that is solved, we will be able to expand quickly. And those who do not meet these requirements must expect penalties. This triad would lead to the fact that it also works.

WELT AM SONNTAG: The next auction is coming up soon, where 1

Haas: One should bear in mind that the frequencies used now are the pack mules on which most of the data services for 82 million people in Germany are delivered. We actually need more frequencies today. If I divide a cake that is already too small for three providers by four and at the same time withdraw investment funds from the providers via an auction, it will be worse for all users. At least one of the network operators would then no longer be able to fully maintain the existing supply for millions of people.

WELT AM SONNTAG: What do you conclude from this?

Haas: The cake has to get bigger. We need more frequencies, for example at 600 megahertz.

WELT AM SONNTAG: These frequencies are used by radio and for wireless microphone transmission at cultural events. You won't make any friends there at all.

Haas: We have already implemented this with the frequencies in the 700 and 800 megahertz range. If we had listened to the broadcasters back then, we would still be living in the Stone Age of mobile communications today. Today, users in rural areas receive their mobile Internet via these frequencies. Mobile Internet usage is clearly on the rise. You can also use these frequencies to broadcast radio via 5G, even significantly more stations than is possible today via terrestrial television. The number of viewers using the current DVBT2 antenna standard is falling every year and is in the single-digit percentage range. In a harmonized usage concept, each user could receive these services on the tablet and via mobile communications.

WORLD ON SUNDAY: 1

Haas: We are assuming that this development will mean that we will no longer grow with our partner like we did last time. At the same time, however, we expect the traffic in our network to quadruple by 2030, especially in the areas in which 1

WELT AM SONNTAG: That doesn't sound like a vision for more growth. Why not just buy 1

Haas: We face up to the competition. That's why it's not on the agenda. As long as the market offers growth opportunities for everyone, such questions do not arise.

WELT AM SONNTAG: Can users expect falling mobile phone prices in the future?

Haas: There will continue to be more performance and the prices will tend to be upwards. Not least because we have to invest more to improve performance. But I don't see a flat price increase without more performance in mobile communications.

WELT AM SONNTAG: New competition is now also coming from above. There are several projects in which satellites are supposed to communicate with smartphones. Do you get scared?

Haas: In areas that are not supplied or can hardly be supplied economically, satellites can help to serve everyone with mobile data. The African continent is an example of this. Satellites are a good addition there. But there are limits to data speed, response time and capacity. In Germany, we tend to see a development that expects an increase in performance here.

How can the critical infrastructure be protected from attacks? A cyber security expert speaks of a "complex problem" because it involves a "four-digit number of operators of critical infrastructures".

Source: WORLD

WELT AM SONNTAG: For more than ten years, the telecommunications companies have wanted to share the costs of network expansion with tech giants such as Google, Netflix and Meta. Now, together with the EU Commission, a renewed attempt is being made. Why should it succeed?

Haas: Around 60 percent of the data that we transport in mobile networks does not originate in Europe. We do not participate in this added value in Europe. At the same time, however, we have to invest in the low three-digit millions every year in our network in order to create the additional capacities that we need for this. But we can't monetize that because we don't pass the cost on to our users. If we want good networks and cheap mobile phone prices in Europe, we need this fair discussion. We are committed to a negotiated solution.

WELT AM SONNTAG: Two parties are needed for a negotiated solution. Do you negotiate at all?

Haas: For the companies mentioned, the European market is the most important market outside of the USA, because this is also where the purchasing power is based. And it's becoming increasingly important because the world is getting smaller in many corners and these services are no longer accessible or are gradually losing access in many parts of the world.

WELT AM SONNTAG: There are many critics of this initiative, including the European body of the telecom regulator BEREC and the Chaos Computer Club. They all fear an end to net neutrality.

Haas: There are controversial opinions. At the end of the day, we have to ensure that we have the best possible infrastructure in Europe and use digitization as a springboard for society and the economy. That must be the main concern of politics. We in Europe, with our regulations as a continent, are the most consistent in implementing the rules on net neutrality. Europe has highly attractive content from sports, science, culture and much more, as well as an internationally recognized code of values. These are advantages that consumers and the economy need to make even better use of in the future.

As a fully qualified lawyer, Markus Haas joined Viag Interkom in 1998, a newcomer in the telecoms industry. This later became O2 and then Telefónica. Telefónica has continued the O2 brand. Haas is 50 years old, married and has two daughters. He lives in Munich, where he was born and studied law at the Ludwig Maximilian University. He later spent a year in the UK at the Oxford Leadership Academy. Previously he had participated in the Executive Development Program at the University of Oxford.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.