Vectoring: Telekom makes concessions to competitors
Dec 19, 2012
Telekom's application targets fixed-network expansion with fast broadband
Competitors' existing investments are protected and they themselves can deploy vectoring
Open network access for all operators safeguards competition
Today, Deutsche Telekom submits an application to the Federal Network Agency to permit the use of vectoring. The aim is to establish legal certainty for all market participants as soon as possible so that expansion can begin quickly.
"Only with vectoring can millions of households be provided with fast and efficient high-performance connections in the fixed network. We must take this opportunity for better networking of society in Germany, and that's why we have now seized the initiative with our application," emphasizes Niek Jan van Damme, Member of the Board of Management for Germany at Deutsche Telekom. In Belgium and Austria the regulatory authorities have already approved the use of vectoring with the support of the EU Commission.
In its application, Telekom has clearly made concessions to its competitors. For example, competitors can themselves deploy vectoring at the cable distribution boxes that they have already connected using fiber optics. Development of new areas by competitors is generally also conceivable. A prerequisite is that they - just like Telekom - allow other companies to use the new connections (open access). In addition, the "KVz-TAL" (subscriber line that runs to the cable distribution box) will generally be retained - this was a key demand of the trade associations of competitors.
As a result of vectoring, households can enjoy download transmission speeds of up to 100 Mbit/s - that's double the present speed of VDSL. Vectoring offers upload speeds of up to 40 Mbit/s, and therefore much more bandwidth than cable network operators are able to provide. Telekom has announced that it wants to invest about EUR 6 billion primarily in expansion of the fixed network with vectoring in the next four years. For this purpose, it is necessary to extend fiber optics up to the cable distribution boxes and to install vectoring technology in the cabinets. This will enable 24 million households to benefit from the new technology.
Vectoring allows bandwidth to be doubled by canceling electromagnetic interference (noise) between lines. However, in order to cancel noise, the operator must have control over all lines at the cable distribution box. This means that other operators cannot install their own technology at the box. Telekom owns a total of around 330,000 cable distribution boxes; competitors have connected to about 8200 of these (2.3 percent) with their own lines.
In areas that Telekom opens up with vectoring, competitors can benefit directly from these investments. For this purpose, the Group is making a bitstream connection for vectoring available as a wholesale product. As a result, competitors can then likewise offer their customers double bandwidths. "However, we also expect such an offer from alternative network operators. Otherwise there is a real threat of a monopoly - albeit a regional monopoly by competitors," emphasizes van Damme.
Telekom is striving to drive the expansion of fiber optics and vectoring, also in cooperations and joint financing models ("contingent model").
About Deutsche Telekom
Deutsche Telekom is one of the world's leading integrated telecommunications companies with more than 131 million mobile customers, 33 million fixed-network lines and over 17 million broadband lines (as of September 30, 2012). The Group provides products and services for the fixed network, mobile communications, the Internet and IPTV for consumers, and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in around 50 countries and has over 230,000 employees worldwide. The Group generated revenues of EUR 58.7 billion in the 2011 financial year - more than half of it outside Germany (as of December 31, 2011).
"We are a pro-competition company," Mr. Bishay said. "If a reseller wishes to compete against the incumbent and us, that's fine. We will provide them with the necessary resources at affordable wholesale rates. We do this because we believe competition brings innovation and fairer prices for consumers and business."
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