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1&1 Drillisch : Draft Expert Intends To Declare Price Increase By Telefonica To Be Unjustified

1&1 Drillisch said that the draft expert, which reviewed a price increase implemented by Telefonica, now intends to declare that the price increase is entirely unjustified. So, the price increase is without effect and does not result in any payments by 1&1 Drillisch.

Telefonica had increased the advance service prices under the MBA MVNO agreement in December 2018 retroactively by around 64 million euros with reference to the 2015 frequency auction.

1&1 Drillisch has rejected the price increase as unjustified.

The companies may comment on the draft expert opinion. The final expert opinion is expected by the middle of the year. This will conclude these proceedings and no expert proceedings initiated by Telefonica will be pending anymore.

With regard to the MBA MVNO agreement, the Price Reviews 2 and 5 which were initiated by 1&1 Drillisch and the request for arbitration against the result of Price Review 1 are still ongoing. In these proceedings, 1&1 Drillisch is seeking substantial retroactive price reductions. Price increases are excluded.

Meanwhile, Telefonica said it will analyse and comment in detail the draft decision of the independent expert.

The intended decision of the independent expert would have the positive effect of the price adjustment provision no longer applying to the full confirmation of the MBA MVNO pricing related to Price Review 1.

In addition, Telefonica Deutschland is of the view that the by 1&1 Drillisch initiated Price Reviews 2 and 5 as well as the filing for arbitration with regards to the decision of Price Review 1 are unjustified.

Telefonica Deutschland is pursuing other claims against wholesale partners in the mid double-digit million euro range.

Telefonica Deutschland confirmed its financial year 2020 outlook.

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