No antitrust objections to TD, Telefonica cooperation deal

11 Nov 2014

Germany’s Federal Cartel Office (Bundeskartellamt) has said it has no objections to the proposed cooperation between Telekom Deutschland (TD) and Telefonica O2 Germany on the provision of high speed broadband connections. Telefonica is looking to increase its use of TD’s new high speed infrastructure for fixed network products, to help it transition from its own ADSL infrastructure to a future-proof next generation access (NGA) platform. To achieve this, Telefonica plans to use TD’s VDSL and vectoring wholesale products, under an agreement signed in December 2013. The process will be realised in phases, with completion scheduled for 2019. With this cooperation, TD says it will be able to share the risks of investment and accelerate further upgrades, while Telefonica said that TD’s decision to deploy vectoring, which will boost downstream speeds up to 100Mbps, will help it to compete on more even terms with cable network operators.

The Bundeskartellamt said it has decided not to take any action against the cooperation, as it is not expected to impede infrastructure competition between the parties concerned or with third companies, adding that without the cooperation, Telefonica would not have been able to offer faster broadband access in the medium term. The competition watchdog’s president Andreas Mundt commented: ‘The competitive situation in broadband expansion has changed in the last few years. Telekom’s competitors have decided not to further expand their own networks and instead to cooperate with the company. It is already apparent that there will be no parallel nationwide expansion of copper and optical fibre networks for the time being. The Bundeskartellamt has taken account of this development in its decision.’