Ahead of both bidding for German 5G licences, Deutsche Telekom and United Internet are exploring the possibility of collaborating on the build out of 5 million FTTH connections. The back-ground here is that DT was reportedly unhappy with the prospect of United Internet’s mobile business taking open access advantage of the incumbent’s investments in network upgrades, and so has suggested the duo split the costs of deep fibre investment.
United Internet AG has welcomed the proposal of Timotheus Höttges, CEO of Deutsche Telekom AG, to jointly expand the fibre optic network in various regions of Germany.
“I welcome the offer of Mr. Höttges to jointly provide over 5 million households with fibre-to-the-home connections and can confirm our wish to participate,” commented United Internet AG CEO Ralph Dommermuth. “In the interests of our two companies, and above all in the interests of the German people, it is right for Germany’s two largest suppliers to join forces and provide this important future technology together.”
But United Internet is fighting shy of an equal partnership. “However, I’d like to qualify the 50:50 investment ratio proposed by Mr. Höttges: our DSL customer base is only a third of the size of Deutsche Telekom’s and as a result we won’t be able to utilise the capacity of the new networks to the same extent. But we’d be happy to invest in a ratio which fairly reflects our market share – that would result in a 75:25 joint venture.”
“Wide-coverage fibre optic networks can not only connect households, but are also the basis for the future connection of powerful 5G antennas. I think we can also soon reach an agreement with Telekom on the two points concerning 5G raised by Mr. Höttges,” added Dommermuth. “To be specific, we can allay the fears expressed by Mr. Höttges that we want to access Telekom’s new 5G network via national roaming. We can actually do without mandatory national roaming on future 5G networks, as the mobile network operators are expected to differentiate themselves from the competition via these new networks as of 2020. However, it’s essential for every newcomer to be able to use the existing 2G/3G/4G infrastructures. After all, customers also expect new mobile networks to offer nationwide availability – something that cannot be achieved in the short term.”
“And just like Mr. Höttges, we want fair, commercial agreements for national roaming and not regulated prices. Mr. Höttges is worried that we’ll want to rent his network for “very low prices” in those areas where our new network is not yet available. And I can understand his concerns,” continued Dommermuth. “Conversely though, I hope he understands that Telekom’s price demands might be too high and prevent us from making marketable customer offers.”