Deutsche Telekom and energy and telecommunications company EWE have formed a joint venture named Glasfaser NordWest.
Deutsche Telekom said the move demonstrates its openness to collaboration with competitors and shows that regulatory intervention is not required for Germany’s digitalisation.
Glasfaser NordWest (NorthWest Optical Fibre) will provide high-speed Fibre-to-the-Home (FTTH) internet to up to 1.5 million households and business in Lower Saxony, North Rhine-Westphalia and Bremen. The joint venture is open-ended in terms of expiration, and the two companies say they will invest up to €2 billion euros over the next ten years.
The partners will build the infrastructure through a competitive selection process, acting as a general contractor. In the first two years, Glasfaser NordWest will designate the expansion areas in advance and Deutsche Telekom and EWE will carry out the upgrades. Fibre-optic lines will become available to the first customers in 2020.
After this period, Glasfaser NordWest will also offer the expansion areas for bidding by third parties. At this point, EWE, Deutsche Telekom and all other interested telcos will compete directly for customers.
“We don’t need regulatory intervention.”
Capturing synergy
Dirk Wössner Deutsche Telekom, said, “Glasfaser NordWest will capture enormous synergy effects because we will plan and build the fibre-optic infrastructure together. This means we’ll have greater capacity utilisation in the operating phase. It also means we’ll be able to connect households that would have been uneconomical otherwise.”
He added, “The new joint venture is logical and a manifestation of our collaboration-based strategy. Ultimately, we are still convinced that we have to team up with other companies to digitalise Germany – and without any regulatory intervention.
“Our partnership shows FTTH expansion without regulation works. We’re boosting expansion and we’re willing to cooperate with competitors. We don’t need regulatory intervention.”
Stefan Dohler, CEO of EWE, commented, “Everyone in northwest Germany stands to gain from this joint venture. Glasfaser NordWest will build the infrastructure, creating the foundation for digitalisation, and customers can then choose their provider. The services from the new infrastructure will be available to all interested telcos under the usual commercial terms.”
The two companies have formally notified Germany’s Federal Cartel Office of the joint venture and will register it upon approval.