2013 Germany - Telecoms, IP Networks, Digital Media and Forecasts

Market consolidation leaning towards a triopoly of dominant MNOs

Germany has Europe’s largest telecom market, supported by an affluent population of about 82 million. Both the fixed network and broadband markets are dominated by Telekom Deutschland (TD), though a number of significant players including freenet/Debitel, Vodafone, Telefónica and E-Plus have gained market share.

In the broadband market, the dominant DSL platform is being reinvigorated by TD’s focus on vectoring technology, though it continues to invest in fibre. This strategy is aimed at competing with cablcos while also reaching the government’s broadband targets for 2020. The greatly consolidated cable sector has invested in extensive network upgrades, offering widespread 200Mb/s services and the expectation of commercial services offering up to 400Mb/s. Faster broadband services are creating demand for new bundled offers while intense competition has seen prices fall dramatically.

The mature mobile market generates the largest proportion of revenue in the sector. In common with most markets the main area of growth is in the fast-developing 4G sector. The market is dominated by TD and Vodafone, though the acquisition of E-Plus by Telefónica, subject to regulatory clearance, would create a triopoly of MNOs with a roughly equal share of subscribers between them. An increasing number of resellers has fuelled competition and placed pressure on tariffs, resulting in lower ARPU. Regulatory pressure on voice roaming as well as termination rates will encourage operators to further step-up their development of data applications to improve profits.

The German mobile data market has enormous potential for growth following massive investments by operators to upgrade networks supporting mobile data services. The regulator anticipated future growth in coming years by auctioning spectrum in the 1.8GHz and 2.6GHz bands, as well as refarming spectrum below 1GHz for use by mobile broadband. Operators have fast-tracked the development of data-rich applications to improve profit margins as voice ARPU continues to fall in response to competition from resellers and regulatory measures on roaming and termination rates.

This report introduces the key aspects of the German telecom market, providing comprehensive data on fixed network infrastructure as well as on key regulatory developments including the status of interconnection, local loop unbundling, number portability, and carrier preselection. It profiles the major operators, and details the development of Next Generation Networks and the battle between the EC, the government and the incumbent on NGN access. The report also provides statistics and analyses on the mobile market, including an overview of the main operators together with 3G subscriber and mobile ARPU forecasts to 2015. It assesses the development of mobile data services and technologies including HSPA and LTE, as well as operator strategies to exploit data revenue in coming years. The fixed-line and wireless broadband markets are assessed, noting the various platforms including vectoring DSL, FttP, powerline broadband, cable wireless broadband, WiFi and internet via satellite. It notes the economic pressures which are encouraging major players to deploy vectoring technologies as an interim measure.

Data in this report is the latest available at the time of preparation and may not be for the current year