Fiber-optic and 5G – United Internet And Deutsche Telekom Close To Agreement On Expansion. Dommermuth: “It Just Depends On Five Words Now.”

United Internet AG has welcomed the proposal of Timotheus Höttges, CEO of Deutsche Telekom AG, to jointly expand the fiber-optic network in various regions of Germany.

Ralph Dommermuth, CEO of United Internet AG, commented:

“I welcome the offer of Mr. Höttges to jointly provide over 5 million households with fiber-to-the-home (FTTH) connections and can confirm our wish to participate. 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. 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 utilize 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.”

Dommermuth added:

“Wide-coverage fiber-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.

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. Conversely though, I hope he understands that Telekom’s price demands might be too high and prevent us from making marketable customer offers. To ensure that differing subjective views on fair terms and conditions don’t lead to a blockade situation lasting years, we need an adjudicating body which can make quick objective decisions when needed. I would once again recommend to Mr. Höttges that the German Federal Network Agency (“Bundesnetzagentur”) take on this role, as it has the greatest expertise. Incidentally, such an arrangement is also common in other countries and was included exactly in this form in the coalition agreement of the Federal Government with regard to the expansion of Germany’s fiber-optic network. If this rule is also to apply to 5G in the near future, then we can agree with Telekom. Everything depends therefore on just five words: ‘In disputes, the Bundesnetzagentur decides’.” – CT Bureau