I=8
According to a June wiwo report, 1&1-Vodafone deal depends on factors that 1&1 cannot control
- According to WiWo report, 1&1-Vodafone deal depends on factors that 1&1 cannot control: Vodafone’s sales success, Vodafone’s network capacity expansion, and data usage by Vodafone’s own customers.
- Vodafone is legally obligated to keep data on these factors confidential for antitrust reasons.
- wiwo cited the profit warning given by 1&1 in June due to “higher than planned wholesale national roaming costs with Vodafone.”
- wiwo blames the profit warning on 1&1’s decision to offer unlimited offers (as opposed to up to 50 mbps in Telefonica network) while Vodafone reduced its offers from 500 mbps to 300 mbps, leading to more capacity usage by 1&1 than anticipated.
Notion-WiWo article on 1&1-Vodafone roaming deal being against 1&1
Assessment
1&1-Vodafone national roaming agreement was initially seen as positive for 1&1. However, it now appears that there were hidden mechanisms that tilt the economics toward Vodafone and raises the risk that roaming costs could be higher in future than previously anticipated. For instance, Vodafone is much behind in 5G standalone network compared to Deutsche Telecom and Vodafone. Given that 1&1 also contributes costs associated with Vodafone’s network expansion, it raises the risk that roaming costs could be higher than anticipated. Similarly, Vodafone could reduce sales and market costs, lowering its own number of customers and leading to higher capacity expansion by 1&1.
In my opinion, this (among other factors to be examined) raises the chance that United Internet could sell 1&1.
See also: Notion-Risk that national roaming costs could be higher than anticipated