Deutsche Telekom and Vodafone are expanding their cooperation. The existing contingent contract, which gives Vodafone access to Telekom’s copper network, will be extended by ten years and expanded to include fiber optics. This means that Vodafone will not only be able to market VDSL connections, but also direct fiber optic connections (FTTH) on the Telekom network. The fixed network partnership complements the existing mobile communications cooperation, the companies announced on Tuesday.
According to its own information, Vodafone has also been using Telekom’s copper connections since 2013, which it markets to its end customers. With VDLS and vectoring from Telekom, Vodafone can offer fast Internet connections even where its own cable network is insufficient. It benefits from the agreement because it makes better use of its network.
Telekom gives FTTH a boost
Just last week, Telekom boss Tim Höttges advertised fiber optic partnerships at an event in order to be able to supply all German households with fiber optics by 2030. “We can’t manage this infrastructure change on our own – but we don’t want that either.” The Bonn network is open to all competitors as long as Telekom also has access to other networks on the same terms.
The trend towards cooperation between the three major German network operators is thus continuing. When taking over Unitymedia, Vodafone had to open its cable network to a competitor on the instructions of the Cartel Office, and Telefónica took this opportunity. Telekom has also opened its fiber optic network for Telefónica. And Vodafone and Telekom also work together in the mobile communications sector. In addition, the competitors agree on the removal of so-called white spots.
The regulatory authority relies on cooperation in the industry. “The Federal Network Agency welcomes the extension of the cooperation between Telekom and Vodafone and their future expansion to fiber optic connections,” said a spokesman for the Federal Network Agency. “This shows that voluntary agreements between the market players are possible.” The competitors should now “negotiate intensively” for “contractual partnerships”.
Those involved can understand that as a wink with the fence post to agree on contentious issues such as the price increase for bit stream access to the telecommunications network. The Federal Network Agency “leaves the time window open for this and will therefore no longer make any regulatory decisions before Christmas that could end or impair such discussions and their success,” the spokesman emphasized.
The Association of Providers of Telecommunications and Value-Added Services (VATM) recently wanted the Federal Network Agency to bring movement into the stalled bitstream negotiations with a clear announcement. It remains to be seen whether the friendly encouragement from Bonn is enough. In any case, the VATM sees in the copper network “with many cost elements considerable leeway to compensate for rising copper or civil engineering prices and to keep prices stable over the long term”.
However, the general willingness of Telekom to cooperate more in fiber optic expansion is welcomed by competitive organizations such as VATM. “We want Telekom as an important partner in the expansion of fiber optics,” said VATM boss Jürgen Grützner. “On the way it will be of central importance that the investment conditions have to be right for all market participants and that future cooperation strategies of Telekom do not primarily serve to secure its own competitive advantage. Now Telekom has to prove that it is serious about the cooperation offer.”