ULL application: "Opportunity to establish investment-friendly regulation"

Jan 22, 2013

  • Deutsche Telekom seeking stable ULL charges for the long term
  • Counterbalance required to offset higher costs and general price increase
  • New incentives to invest created by European and German legal frameworks

Deutsche Telekom has filed an application with the Federal Network Agency for a monthly charge of EUR 12.37 for the provision of unbundled local loop (ULL) lines. For the first time, the approval period is three years with an option to extend for a further three years (until December 31, 2019). The current charge of EUR 10.08 expires on June 30, 2013.

"We are taking European Commissioner Neelie Kroes at her word and expect specific incentives for us to invest billions of euros," underlined Niek Jan van Damme, head of Telekom's business activities in Germany. Last summer, Kroes agreed to more investment-friendly regulation and announced stable prices in the long term for the last mile which would also take into account factors such as the general increase in prices.

The revised German Telecommunications Act also allows the flexibility to take into consideration the costs of voluntary redundancy programs and the employee placement company Vivento in the ULL charges. "The Federal Network Agency should take this opportunity to establish investment-friendly regulation," said van Damme. He is calling on the Agency to be far-sighted: "If you are investing enormous amounts of money in broadband networks, you need to be sure that your infrastructure isn't going to be devalued further." Other providers who have invested in network infrastructures of their own have also called for stable ULL charges - such as the cable network operators and the members of BUGLAS (city network operators such as Netcologne und M-Net).

Background on ULL
The ULL charge is what other telecommunications companies pay Deutsche Telekom each month for provision of the unbundled local loop line, otherwise known as the last mile. In telecommunications networks, that refers to the section of line between the local exchange (main distribution frame) and the customer’s connection. In the case of the shorter ULL CD, the section of line between the cable distribution box (CD) on the street and the connection in the home, Deutsche Telekom has applied for a charge of EUR 8.80 per month (approved to date: EUR 7.17).

The unbundled local loop line is the most important wholesale service on the German telecommunications market, as it forms part of almost all wholesale products. The Federal Networks Agency has continuously cut the ULL charges since 1999 from EUR 12.98 to the current level of EUR 10.08; Telekom has consistently applied for higher charges in view of its cost statements. Deutsche Telekom currently leases out around 9.5 million ULLs.

About Deutsche Telekom
Deutsche Telekom is one of the world’s leading integrated telecommunications companies with more than 131 million mobile customers, 33 million fixed-network lines and over 17 million broadband lines (as of September 30, 2012). The Group provides products and services for the fixed network, mobile communications, the Internet and IPTV for consumers, and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in around 50 countries and has over 230,000 employees worldwide. The Group generated revenues of EUR 58.7 billion in the 2011 financial year – more than half of it outside Germany (as of December 31, 2011).

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