Deutsche Telekom in 10-year contract with Telefonica Germany for FTTH access

Deutsche Telekom has extended its contract with Telefonica for access to its broadband network for the next ten years. Under the pact, which applies in Germany, Deutsche Telekom will grant Telefonica access to FTTH lines with download speeds of up to 1 Gbps for the first time. Telefonica will market Telekom’s FTTH connections to its customers.
This is the first time that a company has decided to use Deutsche Telekom’s FTTH network and follows a recent acceleration Germany’s fiber roll-out. Deutsche Telekom said it wants to conclude similar agreements with other providers.
A pioneering deal: Deutsche Telekom is to open up its fiber-optic networks to competitors on a long-term basis.
Image Credit:  Deutsche Telekom

This contract is an extension to a fiber-optic network deal which was first agreed in 2013, and will give O2 customers in Germany access to speeds of up to 1 Gbps.  Telefonica will also be able to use existing VSDL/vectoring lines. The parties will submit the contract to the Federal Network Agency over the coming days for clearance. The agreement will become effective in spring 2021.

Telefonica already uses Deutsche Telekom’s VDSL network, which reaches 33 million households in Germany vs. approximately 1.8 million households with fiber-optic connections.   Deutsche Telekom will use the proceeds from the contract with Telefonica to further develop its fiber-optic network.

The cooperation is a long-term one and will apply throughout Germany. 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 the Federal Network Agency over the coming days.

Deutsche Telekom CEO Dirk Wössner said: “This is a pioneering deal for the buildout of the fiber-optic infrastructure in Germany for the next decade, based on a voluntary commercial agreement between two large market players from which many people and companies in Germany will benefit.  Deutsche Telekom stands for open networks and cooperations. And we are emphasizing this with this wide-reaching cooperation agreement. This contract will secure the utilisation of our broadband network. And we will receive financial resources that we will re-invest in our networks.”  Wössner added that the company would like to come to similar agreements with other operators in Germany with a view to expanding FTTH access.

Markus Haas, CEO of Telefónica Germany/O2, 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 fiber optic network, especially in large cities. On this basis we can offer our customers first-class convergent products.”

These two companies are already partners for mobile communications. Deutsche Telekom connects 5,000 Telefonica mobile sites to its fibre network. The two sides are also cooperating with Vodafone to improve mobile coverage in Germany.

The collaborative focus from Deutsche Telekom is contrasted against the efforts of Vodafone, which is similarly building out its fibre network. In July, Vodafone said that it was ahead of schedule to deliver gigabit internet to 25 million German homes by 2021, having surpassed 21 million houses.