Bloomberg News

Deutsche Telekom Plans Faster Broadband Rollout in 2013

November 22, 2012

Deutsche Telekom AG (DTE), Germany’s largest phone company, plans to roll out a technology to accelerate broadband on its old copper lines starting next year, providing a cheaper alternative to fiber-optic cables.

The company hopes to get regulatory clearance within six months, Niek Jan van Damme, who heads the Bonn-based operator’s German unit, told reporters in Cologne yesterday. The vectoring technology eliminates electrical signals that corrupt and slow transmission on copper cables. This doubles download speeds and quadruples the pace of uploads, according to Deutsche Telekom, owner of the T-Mobile wireless brand.

“The cost of the project is still being evaluated, and is dependent upon the conditions and support we get,” van Damme said. “We need a facts-orientated discussion. At the moment it is rather emotional.”

European phone companies face a challenge in balancing the need to invest for years to develop fast networks against the need to woo investors with attractive dividends and share buybacks. Deutsche Telekom, which has made slow progress rolling out fiber-optic cables to customers, is betting it can trim expenses and boost its position versus cable operators such as Kabel Deutschland Holding AG (KD8) by speeding up old copper lines.

Market Share

Chief Executive Officer Rene Obermann plans to deliver the faster vectored DSL to 24 million customers in the next four years. This would mean the company would no longer share access to its DSL lines with other operators, something that German regulators introduced to foster competition.

“Telekom is not in any way interested in remonopolising the network,” van Damme said yesterday. “It will help our market share,” he added, declining to specify any targets.

The European Commission said in July that it won’t draft rules to push down the prices that Internet network owners charge for access to copper lines. That helps Deutsche Telekom and other former European phone monopolies that own vast, decades-old networks of copper wires.

Fixed-line revenue at the German division has fallen for years, eroding gains made in the wireless business. The home market accounted for 44 percent of Deutsche Telekom’s net revenue of 43.5 billion euros ($56.1 billion) in the first nine months of this year.

To contact the reporters on this story: Alex Webb in Frankfurt at awebb25@bloomberg.net; Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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