Since 2013, Telefónica has been purchasing fiber-optic network-based copper lines (VDSL/vectoring) from Deutsche Telekom as part of a contingent contract that Telefónica then markets to its end customers. And both companies have now agreed an extension and expansion of the cooperation. Under the agreement, Deutsche Telekom will, for the first time, provide its partner with high speed fiber-optic lines (FTTH) with download speeds of up to 1 gigabit per second in addition to the existing VSDL/vectoring lines. As a result, Telefónica Deutschland will also be able to offer o2 customers a proportion of its broadband offerings on the basis of the Deutsche Telekom network in the coming years. This is the first time that a different company has decided to use Deutsche Telekom’s FTTH network.
The contingent model enables Deutsche Telekom to ensure the long-term utilization of its networks while Telefónica has secured access to Deutsche Telekom’s network at favorable conditions. Deutsche Telekom plans to significantly invest in the buildout of its FTTH networks and the long-term yield from this business is a significant basis for its plans.
Telekom Deutschland CEO Dirk Wössner stated: “This is a pioneering deal for the buildout of the fiber-optic infrastructure in Germany for the next decade, based on a voluntary commercial agreement between two large market players from which many people and companies in Germany will benefit. Deutsche Telekom stands for open networks and cooperations. And we are emphasizing this with this wide-reaching cooperation agreement. This contract will secure the utilization of our broadband network. And we will receive financial resources that we will re-invest in our networks.”
“The long-term cooperation with Deutsche Telekom gives us planning security. In future, we will be able to offer our O2 customers access to the fiber optic network, especially in large cities. On this basis we can offer our customers first-class convergent products”, explains Markus Haas, CEO of Telefónica Germany / O2.
Deutsche Telekom believes this agreement is a milestone in terms of rolling out competitive broadband networks in Germany faster. Dirk Wössner: “With regard to open networks, Deutsche Telekom wants to conclude similar agreements with other market participants. We will also offer this pioneering cooperation to other companies on the market, with the aim of also continuing the philosophy of open access in terms of FTTH buildout in the future.”
The cooperation is a long-term one and will apply throughout Germany. The VDSL and FTTH lines from Deutsche Telekom are wholesale products. Using Deutsche Telekom’s network, Telefónica Deutschland can provide its o2 customers with its own products. Both parties will submit the contract to the Federal Network Agency over the coming days.
Deutsche Telekom’s VDSL network currently reaches some 33 million households in Germany. Approximately 1.8 million households are equipped with fiber-optic lines. Deutsche Telekom will significantly accelerate its fiber-optic buildout in the coming years.
Both companies have been cooperating in the field of mobile communications for a while. Specifically, Deutsche Telekom connects around 5,000 Telefónica mobile stations with its fiber-optic network. Together with Vodafone, both companies are also working towards closing around 6,000 mobile coverage gaps.
A comprehensive statement on Deutsche Telekom’s cooperation with Telefónica and the broadband buildout in general is available in Dirk Wössner’s “Management unplugged”.
