Georgios Ierodiaconou, Citi
Good morning and thank you for taking my question. It’s around Germany. Yesterday, we had some news that one of your main wholesale partners would be participating in the auction and is looking to morph into an MNO. I was wondering if you could share with us what are your existing contractual obligations, what are your thoughts around these kinds of moves, whether it encourages you more to be generous with your MVNO terms or not to be there at all, and if you can share on that, it would be great. Thank you.
Nick Read
The current contract is commercially sensitive and confidential but I would say, broadly speaking, it is a 3G-only contract. We are able to serve notice at any time on that contract. And then there is an orderly transition period because we wouldn’t want to disrupt their business or ours. So I would say it’s a contract that has the right terms and conditions in it. More broadly, I think, for Drillisch to go and change to an MNO, I think, is more a question for them. I think important considerations they will be going through is the coverage obligations that they will have to meet; the fact that there is no firm obligation from existing MNOs to offer national roaming.
Clearly, I can imagine that MNOs may engage at right commercial terms but whether that ends up meeting the financial requirements is a different thing. And this is a big move for them to go from what has looked to be a very successful asset-light strategy into a slightly less predictable, asset-heavy strategy and, therefore what type of returns they can get as a fourth infrastructure going in. So look, I think these are early days. Let’s see how the spectrum auction turns out. Clearly, at this point, we can’t engage ahead of the spectrum auction.
