10 Okt VATM press statement on Deutsche Telekom’s Capital Markets Day 2024
Cologne, 10th October 2024. At its 2024 Capital Markets Day, Deutsche Telekom is presenting the Group’s financial goals for the next three years. According to these, Telekom will continue to rely on so-called ‘homes passed’[1] for the expansion of its fiber-optic network in Germany. This means that a customer cannot book a service, due to a missing physical avliable connection.In this way, around 2.5 million connectable households are to be added annually until 2027. Considering a soberingly low rate of use of around 14 percent at Deutsche Telekom and a planned rate of around 20 percent, an expansion strategy is revealed, which is instead of digitising the country, geared to deterring competition. Telekom’s competitors are already achieving more than 35 percent customer penetration and are getting people online.
VATM Managing Director Dr. Frederic Ufer urgently appeals to Deutsche Telekom’s management not to stick to this highly problematic strategic orientation for the expansion of fibre-optic networks in Germany:
„Converting the country to a future-proof fibre-optic infrastructure is a Herculean task and can only be accomplished by working together and with many strong shoulders. Pushing back competition with unfair practices and refusing to purchase (wholebuy) on the networks will cost Germany many years of unnecessary delay in the expansion of digital infrastructure. Today, Deutsche Telekom would have had the opportunity to readjust its previous fibre-optic expansion strategy – in the interest of consumers as well as business and industry. Unfortunately, all we hear from Bonn is the same old mantra about the homes-passed infrastructure while accepting low take-up rates. Germany will certainly not become a fibre-optic country this way, and many people will have to continue to rely on the outdated copper networks for a long time.
For Telekom, this is clearly the way to transfer its dominant position into the fibre optic era as well. The recently published analysis of the competitive situation on the fixed-line market by VATM and Dialog Consult clearly shows that competition is coming dangerously under pressure considering the market power of Deutsche Telekom. The strategy of freezing the excessive market share within a decade (2020-2030) and curbing competition must imperatively call the regulator into action. This is also evidenced by a veritable potpourri of shady tactics used by Telekom, which regularly have to be stopped by the Federal Network Agency and the courts. For competitors, for instance, access to Telekom networks is made more difficult or refused, infrastructure data is not sent or auction procedures for funding projects are obstructed.
While Telekom continues to profit significantly from the copper-based connections marketed by competitors via corresponding wholesale products, there are so far only four percent competitor connections on Telekom’s FTTH platform. Yet fair access to this platform is of paramount importance for the upcoming migration from copper to optical fibre and for the future of competition.
Therefore, I appeal once again to the company’s management in Bonn: For the next few years focus on a strategy that has the potential to achieve the best for Germany and to accelerate the expansion of optical fibre, not slow it down. And focus on true cooperation in the market – especially on behalf of your investors.“
The „Analysis of the competitive situation on the German fixed-line market“ by VATM and Dialog Consult
(September 2024) can be found here: VATM-Wettbewerbsstudie-2024.
