Cherry picking by Telekom: open network access is intended to protect against double expansion
The topic of the double expansion of fiber optic connections is driving the telecommunications industry, which the federal government wants to supply all households with fiber optics by 2030. “The colleagues at Telekom only slept through the fiber optic expansion,” teased Andreas Pfisterer, head of the German fiber optics group, which is primarily active in rural areas, on Thursday at the Fiber Days conference in Wiesbaden. In the meantime, however, they have “quickly made up ground” and even built connections for fast Internet from the competition. That could lead relatively quickly to an “imbalance in the market” along with cut-throat competition.
In large cities such as Cologne and Munich in particular, the challengers are currently observing the superstructure activities of Deutsche Telekom. The accusation is that the top dog wants to pick the raisins from the glass fiber business. The consequences for the competitors are serious, complained Pfisterer. So they are threatened with losing investor money in the event of a sudden double expansion. Given the option of concluding Open Access contracts, there would be no need for such a thing. Such agreements guarantee competitors non-discriminatory access to an existing network or ducts.
Open Access – “central building block in the end customer business”
Unfortunately, open access is still almost completely undefined in the telco industry, countered Thilo Höllen, who is responsible for broadband cooperation at Telekom Deutschland. Everyone understands something different by that. Nevertheless, the Bonn-based group has forged joint ventures with the municipal utility in Münster, for example, and is building 1.5 million connections on an open-access basis together with EWE, especially in Lower Saxony, of which 600,000 are already available after the first three years. Overall, the pressure is increasing to get into the living rooms of fiber optic customers.
Höllen was also open in principle to an open access deal with the German fiber optics company, after they concluded a cooperation with Vodafone in November. “We’re looking forward to an inexpensive Layer 2 bit stream offer from Telekom,” Pfisterer commented on the offer with a pinch of irony. This is a wholesale product at the Ethernet level, which providers can use to offer Internet and telephone services to end customers beyond the actual network operator. Pfisterer described open access as a “central building block in the end customer business” in order to bring traffic onto the web.
Open-Access-Probleme
In the comparatively young market for open network access, supply and demand do not always meet. “If the price isn’t right, it won’t work,” Höllen said of an exclusion criterion. For example, a network operator charged 35 euros per month per connection from third parties, while he himself stated 29.99 euros for it in the end customer prospectus. Otherwise, an Open Access contract often fails because of “brutal little things” such as the misery that a service technician “is not guaranteed on Saturday at 4 p.m. with a pre-provider”. In addition, Telekom “cuts off an arm” with an open-access purchase because it does not do wholesale business.
The fiber optic business model does not work with 30 to 40 percent network utilization, but requires 60 to 80 percent, said Dirk Pasternack, head of Vitroconnect, which supports telcos with open access offers on the technical side. The approach is also gaining momentum from an investor’s point of view, since the expansion has become more difficult due to high interest rates and inflation.
Referee and yellow and red cards
In order to achieve the government goal, the industry must join forces, Marco Sick, head of Vattenfall Eurofiber and board member of the industry association Breko, also broke a lance for open network access. For the expansion in Berlin, the offshoot of the energy supplier has entered into a partnership with German fiber optics. That’s not rocket science, but a lot of detailed work: “Contracts suddenly have 350 pages.” A referee who sometimes shows the yellow card is also necessary. Then Open Access is a good protection against superstructure.
Without the option of being able to send people off with the red card, it will probably not work, Freenet boss Christoph Vilanek pleaded for stricter sanctions. He called for an obligation for service providers to offer open access, in the sense of the earlier similar requirement in mobile communications, which inspired pure service providers. The legislator or the Federal Network Agency would have to intervene here, since there is currently only one obligation to negotiate. According to him, however, competition should also have settled things in three years.
“mountain hike” or “a bit like a marriage”
At the start of the trade fair on Wednesday, Federal Digital Minister Volker Wissing (FDP) appealed to the industry to step up previous open access efforts. His department wants to “give further impetus” to the associated dynamics. With this in mind, Fabian Bühring, Managing Director of SWN fiber optics from Stadtwerke Neumünster, and Volker Buck from Wemacom in Schwerin signed a framework agreement on an open stage in order to offer products on both networks in the future. Bühring emphasized that both companies had previously built on their own doorsteps, but now need a critical mass so that the business can continue in the long term.
Such a company partnership is “a bit like a marriage,” commented Alfred Rauscher, Managing Director of the Regensburg telecommunications company R-KOM. You follow a path together and combine your strengths in network expansion on site, but you shouldn’t develop envy. If an interested party is only interested in funding, he is “out immediately”. Vesta von Bossel, partner at the consulting firm PwC, preferred to talk about a mountain hike together, which also requires a certain amount of preparation. In the medium term, cooperation would become a “must have” to make the network fit for the future.
(bme)
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