German 5G auction at risk if government demands roaming - FAZ

(Adds comment from German transport ministry)

BERLIN, Dec (Shanghai: 600875.SS - news) 6 (Reuters) - A German regulator has said the government's auction of fifth-generation (5G) mobile licences could be delayed if operators had to offer roaming in rural areas, the Frankfurter Allgemeine Zeitung (FAZ) reported on Thursday.

But the Transport Ministry said national roaming was not possible based on a European provision and so not planned. It said details in a letter cited by FAZ were taken out of context.

FAZ had said the government was mulling changes to the auction requirements envisaging compulsory roaming in rural areas with patchy mobile phone coverage.

FAZ said it was citing a letter from the Bundesnetzagentur (BNetzA) regulator to the economy and transport ministries.

BNetzA's letter said proposed changes to auction demands could lead to incalculably higher costs for the three main operators, FAZ reported.

The Transport Ministry said it would stick to the narrow framework that the European legal basis for local roaming laid out and which the BNetzA also outlined in a recent decision.

"The passage cited by FAZ has been taken out of context and does not reflect the standard's restrictive requirements," the ministry said, referring to the FAZ report.

An Economy Ministry spokeswoman declined to comment.

Determining rules for 5G services that could power connected factories and wireless broadband has been fraught, reflecting concerns that Europe's largest economy, which has been plagued by patchy 4G coverage, could fall further behind rivals.

Germany's three main network operators - Deutsche Telekom (IOB: 0MPH.IL - news) , Vodafone and Telefonica Deutschland - are all expected to bid despite having reservations about the design and possible cost of the 5G auctions.

Any roaming requirement could, if implemented, attract a new market entrant without its own developed network, such as United (Shenzhen: 000925.SZ - news) Internet, which runs virtual mobile network operator 1&1 Drillisch (IOB: 0E6Y.IL - news) .

The network regulator set the ball rolling last month to auction 5G licences, setting a Jan. 25 deadline for submissions and saying the auction would begin in early 2019. (Reporting by Michael Nienaber Editing by Douglas Busvine and Edmund Blair)