1&1 Drillisch’s MVNO business in Germany would become unprofitable when 5G goes mainstream, so investing in spectrum was 1&1 Drillisch’s only choice to keep its business afloat.1&1 Drillisch’s 4th MNO business case will be positive if BNetzA intervenes and mandates competitive national data roaming rates.
- Why 1&1 Drillisch decided to invest in spectrum?
- What was wrong with 1&1 Drillisch’s MVNO business model?
- How much will 1&1 Drillisch need to invest to build a mobile network that will put it on a similar footing with the other 3 MNOs?
- How much more and what type of spectrum will 1&1 Drillisch need to acquire and by when?
- When will 1&1 Drillisch’s 4th MNO operation in Germany turn cash flow positive?
- How long will 1&1 Drillisch’s MNO business case payback period be?
- Can 1&1 Drillisch run a profitable 4th MNO business case without securing competitive national data roaming rates?
- What is the minimum subscriber share and ARPS level required to break even in a reasonable period?
- Can 1&1 Drillisch break even with smartphone subscribers only?
- Should 1&1 Drillisch pursue fixed-to-mobile broadband substitution?
- How many 4G/5G wireless broadband subscribers can 1&1 Drillisch acquire and how much more spectrum will it need?
- Is 1&1 Drillisch’s incremental 4th MNO business case positive?
- Should Bundesnetzagentur intervene and mandate competitive national data roaming rates?
- How low should a competitive national data roaming rate be when first introduced and how fast should the rate decline?
1 Study context and methodology
2 Executive summary
3 The German mobile market: From 4 down to 3 mobile network operators and soon back to 4?
4 Market model projections
4.1 Mobile subscribers: smartphones, prepaid, mobile broadband and wireless broadband subscribers
4.2 Average Revenue Per Subscriber (ARPS)
4.3 Mobile service revenue
4.4 Average mobile data usage per subscriber and mobile data volume
5 1&1 Drillisch’s baseline MNO business case presumptions and outputs
5.1 Current and future spectrum holdings
5.2 Mobile network rollout and 1&1 Drillisch traffic in own versus in national roaming partner’s network
5.3 Purchases used in production including business-critical national data roaming costs
5.4 Operating expenses
5.5 Capital expenditure and spectrum fees
5.6 Gross profit, EBITDA and Cash Flow
5.7 Cumulative cash flow and payback period
6 1&1 Drillisch’s business case analysis & sensitivity
6.1 1&1 Drillisch’s payback period as a function of projected market share and ARPS.
6.2 1&1 Drillisch’s business case with and without 4G/5G wireless home broadband subscribers
6.3 Impact of 1&1 Drillisch’s spectrum holdings on mobile network capacity utilization and national roaming costs
6.4 1&1 Drillisch’s payback period as a function of national data roaming rate glide path
6.5 1&1 Drillisch 4th MNO vs. MVNO business case as a function of wholesale access data rate glide paths
6.6 1&1 Drillisch’s incremental 4th MNO business case
6.7 1&1 Drillisch’s 4th MNO German business case versus Iliad’s 4th MNO Italian business case
- 1&1 Drillisch
- Deutsche Telekom
- Telefonica O2