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Germany Broadband Overview

Germany is the largest broadband market in Europe. From Q4 2005 to Q4 2007 the number of broadband subscribers has almost doubled, and at the end of 2007, the German DSL market distinguished itself through a highly dynamic growth rate - the strongest growth rate in terms of total net additions in the European Union. The country is currently trying to meet the current demand for broadband access by pushing ahead with unbundled DSL and cable network upgrades as rapidly as possible. Deutsche Telekom (DT) is also deploying FTTN+VDSL2 services to ready Germany for a fast digital future.

Deutsche Telekom (DT) is the incumbent telecom operator in Germany with a market share of 45.6 per cent in December 2007, up from 42.6 per cent year-on-year. The company is also the biggest DSL provider in Europe. It operates by way of four strategic divisions, namely T-Mobile, T-Online, T-Home and T-Com covering the company’s entire range of telecommunication services. However, after posting declining revenues DT’s international strategy has shifted lately and is now more concentrated on Germany rather than other international markets. In the wake of this change in strategy, DT sold its holdings in French operator Club Internet to NeufCegetel, and in June 2007 DT also sold its Spanish ISP Ya.com to France Telecom.

The German regulator recently summed up the current state of the telecoms market in 2007. According to the regulator, VoIP and mobile telephony services were in strong competition with the classical fixed telephony service offerings during 2007. In addition, consumer tariffs for mobile and fixed telephony services were in decline, and broadband service take-up continued strong growth, competing with other international leading broadband nations. Alternative broadband providers are successfully increasing their market share, and cable broadband services are finally catching on in German households.

The growing broadband market has opened new revenue streams for German telecoms operators. Despite falling prices, total revenue from the telecommunications market grew by EUR 23.3 billion from 1999 to 2006. However, this long-term view masks a gradual decline in revenue from 2004 to 2006. Overall telecoms market revenue is estimated to be down from EUR 66.3 billion in 2006 to EUR 63.8 billion in 2007. DT and alternative telecoms operators share total revenue streams at the ratio 48:52 respectively, marking the continuous erosion of DT’s revenue stream from an initial 74 per cent in 1997.

Fixed-line penetration stands at 64.5 per cent of the population with 53.7 million fixed access lines over PSTN/ISDN in 2007, down from 54.5 million in 2006. Fixed access with coaxial cable was used on an additional 1.23 million homes, and VoIP over DSL was connected to 3.9 million lines by 2007, up from 2.8 million in 2006. However, the main voice access technology in Germany is mobile, and the number of lines increased from 85.7 million to 97.3 million users throughout 2007.

Mobile Broadband is becoming popular with the masses. General coverage is excellent and prices were so low the mobile user base tripled between 2005 and 2007. During this period, regular users of UTMS access increased from 2.4 million to 8.7 million. Depending on individual network operators UTMS/ EDGE coverage ranges between 56 per cent and 80 per cent. Existing UTMS networks are being upgraded to HSDPA in 2008 and the use of WLAN Hotspots is in high demand too. By end-2007, Germany counted around 10,000 Hotspots.