A partnership between Deutsche Telecom and German utility and telecommunications company EWE will bring fast internet service to as many as 1.5 million households and businesses in northwest Germany. The joint venture, known as Glasfaser NordWest (NorthWest Optical Fiber in English), will offer customers fiber-to-the-home services.
The two companies say they will spend about $2.27 billion over a 10-year period on the fiber project. The partners will act as general contractors and build the network through a competitive selection process. Glasfaser NordWest will designate expansion areas during the first two years of the JV, and the two parent companies will execute the projects. Subsequently, the JV will create a process to select third parties to participate in expansion projects. All comers—EWE, DT and others—will be able to compete for customers on the new networks. Capacity on the network will be available beginning next year.
The two companies had signed a nonbinding declaration of intent in December 2017 that declared interest in establishing the joint venture.
"Glasfaser NordWest will capture enormous synergy effects, because we will plan and build the fiber-optic infrastructure together," said Dirk Wössner, the DT Board of Management member responsible for Germany, in a statement. "This means we'll have greater capacity utilization in the operating phase. It also means we'll be able to connect households that would have been uneconomical otherwise. Ultimately, we are still convinced that we have to team up with other companies to digitalize Germany."
Stefan Dohler, CEO of EWE, said in a statement, "In northwest Germany, EWE is known for fast internet and the digitalization of rural areas. Everyone in northwest Germany stands to gain from this joint venture. Glasfaser NordWest will build the infrastructure, creating the foundation for digitalization, and customers can then choose their provider. The services from the new infrastructure will be available to all interested telcos under the usual commercial terms."