DT to open up VDSL network to competitors

3 Mar 2009

German incumbent Deutsche Telekom (DT) has announced it will open up its VDSL network to competitors and start selling a wholesale service for VDSL double-play packages with speeds of up to 50Mbps. During a press conference at the CeBIT trade show in Hanover, Timotheus Hottges, the company’s board member for Sales & Service, stressed that DT’s decision is voluntary and without pressure from the regulator, the Federal Network Agency (FNA). The company said it is looking for its competitors to invest more in building out broadband infrastructure in Germany. DT plans to charge EUR30 (USD38) per line, but says that as market penetration grows, the wholesale price will fall.

DT’s announcement follows the federal government’s broadband strategy, published in mid-February 2009, which aims that by 2010 all households in Germany should be able to use at least 1Mbps lines, and by 2014 broadband lines with speeds of at least 50Mbps should be available for 75% of households. The investments needed to reach those goals are so large that they must be shared, says the incumbent, which plans to invest EUR300 million, EUR100 million of which in rural areas, in order to provide at least 250,000 more lines. DT also relies on collaboration with competitors for the expansion of its VDSL network. In October 2008 the incumbent called on its rivals for help and two months later announced it would be working with Vodafone to bring the service to Wurzburg and Heilbronn, while in the first month of the new year, DT reached an agreement with EWE to expand the fibre-optic network to cover eight towns in Lower Saxony and the city of Bremerhaven.

This move is a major change in strategy for DT. The incumbent previously argued it was not required to open its VDSL network to competitors, insisting it constituted a ‘new market’ and was therefore, under German law, exempt from regulation.