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At the end of June 2024, CEO Ralph Dommermuth reiterated in an interview that they still plan to have 3,000 antenna sites at the end of 2024.
“By the end of the year, there will be around 3,000. We are making good progress,” he said.
Exane’s comments on rising competition is actually true.
Freenet’s new agreement with Telefonica enabled it to launch new products aimed at stealing market share from 1&1.
“I think you all know that Drillisch or 1&1 are working with up to 15 brands. We are not doing that in the past due to the limitations of SIM-only tariff plans applicable to those brands. Now we are enabled and you’re going to see white label brands in the near future and a whole number of them because we see that this is a good way to be more prominent on the Google search, but also on the things like VERIVOX or Czech 24,” its CEO Christoph Vilanek said.
1&1 CEO Ralph Dommermuth recently commented in the earnings call that he was surprised at the aggressive pricing seen since last year.
"You see that they have a nice contract growth but if you look at their service revenue, there haven’t been any major changes,” he said. “What does it benefit Telefónica to have a couple of thousand more customers if it doesn’t have a higher service revenue at the end of it?” he added.
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Migration of customers has started again
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1&1 offers a free phone call and internet tariff through GMX
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United Internet secured €800 million from the Japan Bank for International Cooperation (JBIC) to expand 1&1’s mobile network.
Wow an €800 million loan guarantee is very important for 1&1. Maybe 7 or 8 in importance
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1&1 has migrated almost 50% of its customers to own network, expects to grow the number of base stations to 1,000 at the end of March from 508 in September
Assessment
It’s good to see the customer migration having picked up nicely again. At this rate, 1&1 should be able to complete its migrations by summer as dictated by the regulator. Although the main antenna supply is still not delivering as expected, the growth in the number of base stations is not that bad.
A post was merged into an existing topic: Telecommunications Industry
I=8, April 11, 2025
Federal Cartel Office sides with 1&1 in antenna sites dispute with Vantage Towers and Vodafone
The Federal Cartel Office preliminary findings indicate that Vodafone and its subsidiary, Vantage Towers are liable for the failure by 1&1 to meet its antenna obligations at the end of 2022.
“Based on the findings obtained so far, the delayed provision of the contractually agreed locations must be considered an antitrust-contravening hindrance to 1&1’s market entry as a fourth network operator,” said Cartel Office President Andreas Mundt.
The Cartel Office said it’s considering ordering the provision of the relevant sites within three years, with additional measures to follow in mid-2025.
Vantage Towers had to give 1&1 access to 3,800 antenna sites by 2025. However, only a fraction of these are currently available.
1&1 had an obligation to provide 1,000 active antenna sites at the end of 2022, but due to delays by Vantage Tower’s, it only managed to construct 5. Vantage was supposed to provide around two-third of the 1,000 sites.
It currently has 1,000 active antenna sites, with another 5,000 under development.
There were reports that the Federal Network Agency was looking to impose a penalty of €50,000 per location for failing to meet the 2022 obligations. However, the amount of the penalty depends on how convincingly 1&1 can explain the delays.
Assessment
If the Federal Cartel Office compels Vantage Towers to fulfill its obligations by 2028, 1&1 will be in a position to accelerate its network rollout. The findings could also support its defense against the €50 million penalty expected from the Federal Network Agency.
United Internet wants to acquire 9.19% shares of 1&1 at EUR 18.50
Assessment of United Internet’s offer to acquire additional 9.19% shares in 1&1
I find the rationale provided by management for acquiring the additional 9.19% stake in 1&1 to be a bit unconvincing. While United Internet already holds a controlling majority and can effectively pass shareholder resolutions, the explanation that the acquisition is solely intended to “stabilize” the shareholder structure raises questions.
In my view, the synergies referenced by analysts are more likely to be fully realized under a Domination and Profit and Loss Transfer Agreement (DPLTA) or a squeeze-out . A DPLTA requires 75% voting rights—already achieved—while a squeeze-out requires 90% (via merger) or 95% (post-DPLTA).
By increasing its stake to 90%, United Internet may be positioning itself for one of these outcomes in the medium term. If a squeeze-out were to occur, minority shareholders could be exited before the full value of 1&1’s Open RAN strategy is realized— a process I estimate could take 2-5 years.
As such, the possibility of a squeeze-out could affect the investment appeal of 1&1 shares for long-term holders?
Yes it could. The other question is how likely that is and which kind of upsides United Internet has in this scenario.
They had an IPO of Ionos not so long ago showing their appetite to have subsidiaries listed. (I did not explore this rationale further)
I also think given that they stated a squeeze out is not planned they couldn’t do it in the near future without loosing credibility.
Did you investigate those questions and what analysts mean with synergies, cost savings and more effective management further? I recently experimented more with GPT o3 and found it’s answers to be very good.
After further research, I maintain that United Internet’s long-term objective is probably to squeeze out 1&1’s minority shareholders. However, due to the legal and compliance steps required — which typically take up to 12 months, such a move is unlikely before late 2026. Below are the key arguments for and against this outcome.
Arguments for a squeeze-out
When United Internet increased its stake to 90%, it stated that a DPLTA (Dominant Profit and Loss Transfer Agreement) or squeeze-out was “not planned.” However, such statements are considered “forward-looking” and not legally binding . Case law shows many companies (e.g., KUKA, Kabel Deutschland, Schwarz Pharma) reversed such positions without legal consequence. Courts generally require proof of intentional deception, which is difficult to establish. If investors know that these statements are “forward-looking”, it reduces the possibility that United Internet will lose credibility by deviating from its stance.
United Internet already holds over 75% of 1&1, which enables it to block any shareholder vetoes such as capex increases (threshold: 25.1%). Raising its stake to 90% does not provide significant additional operational or governance efficiencies, but rather eliminates the potential for activist shareholders to cross the 10% voting rights threshold , which would allow them to demand special audits or pursue group litigation. Given that there was no 1&1 activists, this rationale seems weak.
In short, the move is about strategic flexibility and risk reduction, not about day-to-day cost savings or management bandwidth
Berenberg said in September 2025 that their valuation of United Internet carries an 80% discount due to its complex holding structure. It argued that a full buyout of 1&1 minority shareholders followed by a spin-off of IONOS could significantly unlock shareholder value and lead to a re-rating of United Internet shares.
United Internet currently trades on an EV/EBITDA multiple of 6.1 x (Enterprise Value €7.90 bn/ LTM EBITDA €1.296 bn). If a post–squeeze-out re-rating lifted the multiple by 0.5 turns to 6.6x, the extra 0.5x applied to €1.296 bn EBITDA would add roughly €648 million to the enterprise value, an 8.2% uplift.
During the Q4 2024 earnings call, CEO Ralph Dommermuth stated that he remains open to acquiring more shares in 1&1 when opportunities arise — reinforcing the view that a long-term consolidation of ownership is on the table. I think there has been a change in management’s stance when it comes to giving subsidiaries more independence since Dommermuth also stated that they won’t sale more IONOS shares since the business is doing well. IONOS EBITDA margin is twice that of 1&1 yet its revenue is almost three times lower.
United Internet reported 2.2x financial leverage at the end of Q1 2025, with management indicating it was comfortable with up to 3.0x. This provides substantial debt headroom to finance a squeeze-out. Additionally, the EUR 800 million JBIC loan can be used to fund the network rollout, freeing up free cash flow for potential shareholder buyouts.
By removing minority shareholders and delisting 1&1, United Internet could reduce governance, listing, and compliance expenses. I estimate these savings to be around EUR 10 to 20 million per year (guestimates).
Assuming a price of EUR 25.40 per share (around 39% above current levels), and minority shareholders holding around 17.7 million shares , the total cost would be approximately EUR 450 million . At a 3.5% interest rate, this would imply annual interest expenses of EUR 16 million, which could be offset by operational cost savings post-squeeze-out.
Arguments against a squeeze-out
1&1 is currently profitable, and it may not incur any significant losses that United Internet could use to offset its tax liabilities through consolidation in the near future. This removes a common incentive used in other holding company structures.
1&1 expects to incur EUR 450 million in CapEx in 2025 for its network rollout. There are also expected costs associated with the low-band frequencies, both next year and in 2029. Given the ongoing uncertainty and capital intensity of the network buildout, United Internet may prioritize stabilizing cash flows and execution before initiating a capital-intensive squeeze-out.