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Deutsche Telekom cuts broadband tariffs

EC antitrust probe does the trick

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Deutsche Telekom has agreed to cut the charges rivals must pay to access its local telephone network or local loop. The decision is in response to European Commission antitrust charges which resulted in the company being fined €12.6 million last year. German DSL outfit QSC complained about unfair fees and Deutsche Telekom paid the price.

DT’s concession will lead to significant reduction in the line-sharing fee that competitors pay the company for shared access, in particular for DSL lines.

Despite a 2001 EU directive that DT must give competitors shared access to its local loops, only a few rivals in Germany found it profitable to avail themselves of this. No company entering the fray has been able to reach any significant market position.

Deutsche Telekom is the dominant supplier of broadband access in Germany, both wholesale and retail. DT had 4.1m broadband lines at the end of 2003 compared to a mere 500,000 for rival operators - few of them based on line sharing.

"We believe that competition between operators is the best means for bringing the overall prices down," said EC competition commissioner Mario Monti.

Despite these developments, BT still intends to make broadband a mass market in Germany and attract at least ten million DSL customers by 2007. ®

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