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Telekom puts competition in the fixed network under pressure

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How well does the competition work in the German landline market? Can major telecom competitors such as Vodafone, 1&1 and O2 hold their own against the former monopolist? A current analysis by the industry association VATM in cooperation with DIALOG CONSULT sees the competition in this country under pressure. Telekom is not only increasing its market share in the fiber optics sector. The Bonn-based group can also win more customers with DSL connections.

Telekom continues to expand market position

The VATM calls on the Federal Network Agency to react. Competitors must be able to compete with Telekom. Because Telekom is a “special case” in an EU comparison. While in other countries the respective ex-monopolist is steadily losing market share, Telekom can further expand its market position in Germany. According to the study, around 70 percent of all end customer fixed network connections in Germany are implemented via Telekom’s copper platform.

According to VATM, this is how the approximately 39.5 million connections on the fixed network market were distributed at the end of 2022:

  • Telekom DSL end customer connections: 13.9 million (35.2 percent)
  • Non-broadband retail connections Telekom: 2.6 million (6.7 percent)
  • Connections of all competitors via Bitstream/Resale: 8.0 million (20.3 percent)
  • Connections of all competitors via local loop: 3.1 million (7.9 percent)
  • Connections of all competitors via HFC/cable: 8.8 million (22.3 percent)
  • FTTH/B connections from all competitors: 2.2 million (5.6 percent)
  • Telekom FTTH/B connections: 0.8 million (2.0 percent)

In recent years, the importance of copper-based connections has steadily decreased. But it will still be many years before fiber optic connections overtake traditional connections.

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Telekom relies on “aggressive prices” and wins many customers

In addition, according to VATM, Telekom is the “most aggressive price provider” in the German fixed network market. Depending on the range of tariffs, the effective price of the competitors is between 19 and 30 percent higher than what Telekom offers. The Bonn group set the prices so low that the competitors no longer had a margin. Because they have to pay for advance services to Telekom.

Last year, Telekom was able to add 237,000 end customer broadband connections. The biggest competitors, on the other hand, lost customers. Vodafone reported 247,000 fewer broadband connections, at 1&1 the number of broadband connections fell by 140,000.

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