O2 Deutschland signs 10-year FTTH wholesale deal with Deutsche Telekom
Telefónica’s O2 fixed and mobile business in Germany has signed a 10-year deal with its rival, Deutsche Telekom, to share the costs of fibre.
The agreement means the O2 Germany will use Deutsche Telekom’s fibre-to-the-home (FTTH) network to connect customers at speeds up to 1 Gbps.
“This gives both parties long-term planning security,” said Dirk Wössner, Deutsche Telekom’s board member for Germany and managing director of Telekom Deutschland, the group’s business within Germany.
“It allows Deutsche Telekom to reinvest the financial resources from the purchase of these lines in its network expansion. On the other hand, it allows Telefónica to continue using the most modern telecommunications network.”
Telefónica has already had a deal with Deutsche Telekom to use its copper local network, used for VDSL connections, but this is the first time the two have agreed to share fibre.
Markus Haas, CEO of Telefónica Germany, said: “The long-term cooperation with Deutsche Telekom gives us planning security. In future, we will be able to offer our O2 customers access to the fibre optic network, especially in large cities.”
Deutsche Telekom said that the deal will apply throughout Germany. The companies said: “The VDSL and FTTH lines from Deutsche Telekom are wholesale products. Using Deutsche Telekom’s network, Telefónica Deutschland can provide its O2 customers with its own products.”
Both parties will submit the contract to BNetzA, the German regulator – the Federal Network Agency – “over the coming days”, they said.
The companies said that “Telefónica has secured access to Deutsche Telekom’s network at favourable conditions. Deutsche Telekom plans to significantly invest in the buildout of its FTTH networks and the long-term yield from this business is a significant basis for its plans.”
Wössner said that similar deals might be offered to other companies in the German market.
“With regard to open networks, Deutsche Telekom wants to conclude similar agreements with other market participants,” he said. “We will also offer this pioneering cooperation to other companies on the market, with the aim of also continuing the philosophy of open access in terms of FTTH buildout in the future.”
He noted: “We are already cooperating with other companies such as Deutsche Glasfaser, Süwag, and Stadtwerke Münster today. We are also exploring new directions. This is demonstrated by the establishment of the Glasfaser Nordwest joint venture with EWE or the public-private partnership in the Stuttgart gigabit region.”
Deutsche Telekom’s VDSL network reaches some 33 million households in Germany. According to Euromonitor, there were 41.5 million households in Germany in 2019, and a population of 83 million people. Only 1.8 million households already have FTTH.
“Deutsche Telekom will significantly accelerate its fibre-optic buildout in the coming years,” said the company.
Wössner said: “One kilometre of civil engineering alone costs approximately €100,000. Thousands of diggers are required to supply large areas of Germany with the fast internet.”