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Germany - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Germany's telecommunications services market generated revenues of €66,800 million in 2004, a figure that increased to around €68,300 million in 2005. Of the 2005 figure, €25,100 million was derived from the fixed-line services market (includes network operators, Internet service providers, and resellers), up from €24,700 million in 2004. Incumbent fixed-line operator continued to account for the bulk of fixed-line revenues in 2005, at around 71% of all revenues (down from 72% in 2004). Competitors are believed to have accounted for nearly 12% of all fixed lines in service at the end of 2005; at that time, a total of 55.100 million fixed lines were in service across Germany. Currently, four mobile network operators and an increasing number of mobile virtual network operators (MVNOs) and service providers serve more than 82 million cellular and third-generation (3G) wireless telephone customers in Germany. The saturation point has now been reached, with over 100% penetration of mobile phones reported by both operators and the narional regulatory authority, the Federal Network Agency (BNetzA); however, the total subscriber figure is believed to include as many as a million 'inactive' subscribers. Deutsche Telekom-owned T-Mobile continues to dominate the market, although its lead is diminishing as smaller rivals E-Plus and O2 Deutschland attract customers to their networks. Vodafone Deutschland remains the second-placed operator, with just under one million customers separating it from T-Mobile. Germany's mobile communications services market was reportedly worth €28,000 million in 2005. The take-up of broadband services is also gaining momentum in Germany, with 10.7 million broadband customers registered at the end of 2005, up from 6.9 million in 2004. Of the 2005 figure, 10.4 million customers took digital subscriber line (DSL) services, up from 6.7 million in 2004. Approximately 27% of German households took broadband services at the end of 2005. At that time, more than 60 companies were providing DSL services, either through resale of Deutsche Telekom lines or via their own infrastructure. Competitors accounted for 40% of the DSL market in 2005, although much of this was accounted for by resale initiatives. Directly, competitors served just 23% of the DSL market in 2005. Broadband services are also offered via cable modem, powerline connections, satellite links, and W-LAN or Wi-Fi platforms. There were 240,000 cable modem customers in 2005, up from 145,000 in 2004, while the number of powerline customers totalled just 9,600 at the end of 2005. These data mask a turbulent year in the operating sector as operators scarmbled to consolidate in order to keep pace with Deutsche Telekom. Vodafone has increased its ownership in fixed-line operator Arcor to 100% and seems likely to use that company to offer triple play services in Germany. ISP freenet agreed to merge with mobile services provider mobilcom in 2005, although this merger has run aground amid legal challenges brought by several minority shareholders in both companies. Telecom Italia-owned HanseNet has just acquired AOL Germany and has entered into a partnership with broadband operator QSC to extend its coverage into new markets within Germany. QSC has itself entered into a joint venture with Tele2 that will operate a "substantial" unbundled local loop broadband network across the country, and has also acquired a majority stake in broadband operator Broadnet. In the cable sector, Unity Media has emerged from the combination of cable operators iesy, ish, and Tele Columbus (although it has sold-on most of Tele Columbus). In the meantime, Deutsche Telekom has been fighting a losing battle with European Commission competition commissioners regarding its new very high-speed DSL (VDSL) broadband network, which it hopes will stave off the downturn in revenues afflicting its core fixed network business. The company has been attempting to limit competitors' access, or at least keep access prices high, while it recoups the cost of building the network. The EC regulators have insisted that Deutsche Telekom open the platform to competition at all levels by December 2006. The VDSL network was operating in 10 cities as of September 2006.
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