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Competition: German ‘Internet tycoon’ challenges DT to join his fibre venture


Angela Merkel: a politician with money to spend on fibre to the home via Flickr © EU2017EE (CC BY 2.0)

Despite Deutsche Telekom’s recent flurry of announcements concerning its broadband activities in Germany, the fact remains that only  2.5 per cent of German households are so far hooked up to fibre, an increasing concern to German politicians, not to mention independent Internet providers.

Reuters reports that the billionaire founder of United Internet AG, Ralph Dommermuth, is challenging DT to join a consortium of Internet providers to build a fibre access network that all could share.

United Internet is one of Germany’s leading ISPs with 2.91 million DSL customers - customers Dommermuth would dearly love to upsell to a fibre connection, of course.

Dommermuth says that the broad industry should take the lead on fiber-laying in Germany, implying that the size of the task was so great that a reluctant-to-invest DT isn’t up to doing the job itself (a familiar refrain).

Deutsche Telekom says it has already made proposals along similar lines.

What’s recently changed to stimulate the move by Dommermuth is a pledge by Angela Merkel’s newly formed government to spend €10-12 billion to create a ‘Gigabit society’ in Germany by 2025. The nightmare for Dommermuth is that the incentive cash ends up with DT which can then set about building a fibre access near monopoly, much to his company’s competitive disadvantage. A joint effort is much to be prefered from his point of view.

Dommermuth kicked off his proposal in an interview with newspaper Welt am Sonntag.

“Each telecommunications company that wants to participate in this alliance would contribute capital according to its market share,” he’s reported as saying.   He says United Internet would be willing to invest €1.4 billion euros in line with its 14 per cent market share, but Deutsche Telekom’s participation would also be “critical”.

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