Germany's 1&1 switches to Vodafone for 5G network deal

Reuters

Published Aug 02, 2023 08:16AM ET

Updated Aug 02, 2023 10:10AM ET

LONDON (Reuters) -German mobile and broadband provider 1&1 said it had agreed a deal for Vodafone (NASDAQ:VOD) to provide 5G coverage to its customers, ousting current network partner Telefonica (NYSE:TEF) Deutschland by October 2024 at the latest.

1&1, which is majority owned by United Internet AG, said Vodafone would provide mobile coverage in areas not covered by its new 1&1 network, including 5G, 2G and 4G, under a deal that would be concluded as soon as possible.

Telefonica Deutschland's shares slumped 16% to a three-year low of 2 euros after the announcement, while parent company Telefonica fell more than 7% in Madrid.

Shares in Britain's Vodafone rose 3% and 1&1 soared 15%, set for its biggest one-day gain since 2008.

1&1 is building a fourth mobile network in Germany, where it competes with Deutsche Telekom (OTC:DTEGY), Vodafone and Telefonica Deutschland.

The new announcement marks a rapprochement between the two companies after 1&1 filed a complaint with Germany's cartel office, blaming its slow progress on rolling out radio masts on Vodafone's Vantage Towers infrastructure business.

Vodafone's new Chief Executive Margherita Della Valle is focusing on improving the company's performance in Germany, its biggest market.