November 21, 2025, 10:24 am | Read time: 4 minutes
The billion-dollar allocation of 5G frequencies was unlawful—this has now been confirmed by the Federal Administrative Court. This ends a years-long dispute over political influence, competitive disadvantages, and the role of the Federal Network Agency. The allocation must be redone, which could have significant impacts on market structure and tariffs.
With its decision, the Federal Administrative Court in Leipzig dismissed the Federal Network Agency’s appeals against previous rulings by the Cologne Administrative Court. It is now legally established: The auction rules and allocation conditions for the 5G frequency allocation from 2018 and 2019 were inadmissible. The Federal Network Agency must restart the entire process for the frequency ranges at 2 and 3.6 gigahertz.
Overview
2019 5G Frequency Allocation Violates EU Guidelines
Between March and June 2019, the Federal Network Agency auctioned 5G licenses for the first time in the history of the Federal Republic. The frequency blocks went to four providers: Deutsche Telekom, Vodafone, Telefónica, and, for the first time, 1&1 Drillisch. There was an intense bidding war that brought the state revenues of 6.55 billion euros. The allocation lasted 497 rounds in total—a record.
However, last year, the Cologne Administrative Court declared that the process was not conducted properly. The then-president’s chamber of the Federal Network Agency did not act independently enough when setting the rules. The court saw this as a violation of the European law-guaranteed principle of agency independence. Particularly significant was the political influence from the Federal Ministry of Transport under Andreas Scheuer (CSU), which prevented a binding obligation for network use by third parties.
Agency Announces Swift and Transparent Process
The Federal Network Agency announced that the new process will be conducted swiftly, transparently, and without discrimination. President Klaus Müller emphasized in a statement on the ruling: “The Federal Network Agency will promptly restart the 5G frequency process to ensure legal clarity and planning security for companies as quickly as possible.” At the same time, the agency assumes that “the mobile networks in Germany will continue to be expanded swiftly.” Until the reallocation, the existing frequency allocations remain valid.
The procedure was triggered by lawsuits from EWE TEL and Freenet. They criticized that, as providers without their own network, they were disadvantaged because there was no mandatory opening of the networks of the major operators—Deutsche Telekom, Vodafone, and Telefónica. Instead, the then-policy relied on voluntary negotiations, resulting in real competitive barriers. Freenet acted in the procedure as a so-called mobile virtual network operator (MVNO), purchasing and reselling capacities.
Telekom Sold User Location Data
Do you still have a landline phone?
Possible Impacts on Market and Prices
As early as 2019, observers criticized the high bids as investment-inhibiting. The court’s decision could now lead to a fairer market distribution and possibly lower 5G tariffs.
BREKO also sees a need for action. New market realities, such as hybrid products from mobile and fixed networks, must be included in the new regulations. Meanwhile, there is also discussion about market consolidation, such as a possible collaboration between Telefónica and the still-developing network of 1&1. This could change the demand for frequencies and influence future prices.
Consequences for Network Operators and Customers
Overall, the Federal Administrative Court’s ruling on November 20, 2025, has both political and economic consequences. But what does it ultimately mean for mobile operators and especially their customers?
Due to the reassessment of the 2019 auction, timelines for further 5G expansion are particularly uncertain, as mobile operators like Telekom, Vodafone, or Telefónica now have to check whether the frequency blocks assigned to them are legally valid. If a reallocation is necessary, additional costs or adjustments to existing licenses may be required.
Read also: What LTE, 5G, and HSDPA+ Say About Mobile Internet
Strategic decisions on network expansion, collaborations, or investments could also be postponed until the legal framework is clarified. Rural areas could be particularly affected by potential delays if expansion projects are put on hold.
For smaller providers and newcomers like Freenet or EWE TEL, the ruling opens up new opportunities: A future design of the allocation could provide them with better access to networks and more competition-friendly conditions. This is potentially positive for customers. In the medium term, better tariffs, strengthened competition, and more efficiently used frequencies could lead to higher network quality and lower prices. In the short term, however, a slowed network expansion and possible supply restrictions are expected—especially in structurally weak areas.