Deutsche Telekom, Telefonica Deutschland team up on broadband

Telefonica Deutschland has signed an agreement to use new high-speed broadband services becoming available from Deutsche Telekom.

The two operators already have arrangements in place under which Telefonica Deutschland (Munich, Germany) rents local loops from Deutsche Telekom (Bonn, Germany) to provide broadband services based on legacy ADSL networks.

Under the new deal, the operator – a subsidiary of Spanish telecoms incumbent Telefonica (Madrid, Spain) – will rent capacity on VDSL lines that Deutsche Telekom is modifying through the use of vectoring technology.

Telefonica Deutschland has signed an agreement to use new high-speed broadband services becoming available from Deutsche Telekom.

The two operators already have arrangements in place under which Telefonica Deutschland (Munich, Germany) rents local loops from Deutsche Telekom (Bonn, Germany) to provide broadband services based on legacy ADSL networks.

Under the new deal, the operator – a subsidiary of Spanish telecoms incumbent Telefonica (Madrid, Spain) – will rent capacity on VDSL lines that Deutsche Telekom is modifying through the use of vectoring technology.

Vectoring is designed to boost connection speeds by reducing interference between lines and the German incumbent claims the technology will enable it to provide fasters services than are currently available from the country’s leading cable operators.

The technology is controversial because to work effectively it requires one operator to have control over all of the lines at a cable distribution box, making the unbundling of networks difficult or even impossible.

Nevertheless, German authorities recently blessed Deutsche Telekom’s plans to spend €6 billion ($7.85 billion) on the rollout of VDSL and vectoring infrastructure across Germany, despite opposition from Breko, a lobby group that represents the interests of smaller alternative operators.

Deutsche Telekom says the partnership with Telefonica Deutschland will ultimately give broadband customers of the latter the option of upgrading from ADSL to VDSL services.

Work on the technological transition is set to take place in phases, starting next year, and scheduled for completion by 2019.

“In combination with our high-performance mobile data network, we will be able to accelerate our convergence strategy even more effectively,” said Rene Schuster, the chief executive of Telefonica Deutschland. “Our customers and partners will be the big winners.”

Deutsche Telekom said the partnership would allow it to share the risks of investing in high-speed networks.

The collaboration still requires the approval of the Bundesnetzagentur, the German regulatory authority, as well as the country’s Federal Cartel Office.

Meanwhile, Deutsche Telekom’s vectoring proposals have yet to authorized by the European Commission.