More partners for new networks

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Vodafone also wants closer fixed network cooperation with Deutsche Telekom. Telekom has signed up a new partner for the roll-out of its new high-speed network in Germany. The two companies have signed a preliminary contract to this effect.

Vodafone wants to make more use of Deutsche Telekom's new super-fast networks in future. Telekom intends to invest around EUR 6 billion in the broadband roll-out of the fixed network over the next few years. This will principally be achieved using vectoring, with which households could enjoy download transmission speeds of up to 100 Mbit/s – double the present speed of VDSL. Around 24 million homes in Germany are set to benefit from the upgrade.

Layer 2 bitstream line "We are delighted to have another partner on board in the shape of Vodafone to share the investment risk," underlined Niek Jan van Damme, head of Deutsche Telekom's Germany business. And he adds, "this gives us greater certainty of achieving the necessary number of customers for the new network and lets us push ahead with the roll-out."

The agreement was reached under what is known as the contingent model which allows competitors to obtain lines from Deutsche Telekom at reduced charges. In return, they undertake to purchase a certain volume. Vodafone intends to purchase both VDSL and the new vectoring lines that are to be installed. The contract also defines a new wholesale product for the first time: the layer 2 bitstream line.

More freedom to structure end-customer products This product is handed over to the competitor's network much closer to the end customer, allowing the competitor to generate more added value of its own because less network performance is required from Deutsche Telekom. Known as layer 2 handover, this also gives the competitor more freedom to structure its end-customer products. Above all, this is a wholesale product that is particularly suited to competitors' high-performance IPTV services. Vodafone will purchase the conventional layer 3 bitstream line as an interim solution until this wholesale product is implemented. This also allows Vodafone to realize vectoring lines and an IPTV service.

The cooperation agreement will be submitted to the Federal Network Agency and the Federal Cartel Office for approval. Cooperation is scheduled to start before the end of the year.