Vodafone dumps DSL for LTE in Germany
Cellco plans to migrate all fixed broadband customers to 4G, avoiding high line charges to Deutsche Telekom
Published: 23 August, 2011
READ MORE: Germany | Vodafone Group | Broadband | LTE
Germany was the first major market where Vodafone invested in fixed broadband infrastructure, after it acquired wireline activities as part of its Mannesmann takeover. However, the firm has never forgotten its wireless-only roots and is looking to use LTE in as many cases as possible for both fixed and mobile services, even in Germany itself, where it plans to migrate all its DSL customers to 4G.
The cellco's German subsidiary has announced plans to move its fixed line DSL customers to LTE and axe its DSL services. Subscribers who do not want the LTE offering will be 'sold' to rival providers.
Vodafone's motivation is predictable - it wants to avoid the high fees it has to pay incumbent Deutsche Telekom for DSL access, which total about €500m a year. It will also save other network costs by putting all its customers on a single infrastructure, especially as it believes it will have spare capacity in its LTE network for years to come. There will also be commonality between urban offerings and those in rural areas, where Vodafone and other carriers are building out 800MHz LTE networks to address users underserved by broadband.
Despite the various costs of maintaining a copper network, most mobile operators have given up on wireless-only and sought out fixed line partnerships or acquisitions. This looks to continue with LTE, because of fears that spectrum capacity will quickly run out, and because DSL can be used (via femtocells or Wi-Fi) to offload traffic from precious cellular networks.
But Germany is an exceptional market because of its particularly high unbundled line costs, says Vodafone, which makes fixed LTE services a viable alternative. The German regulator recently reduced Deutsche Telekom's unbundled line costs, but only from €10.20 to €10.08 per month. And some European regulators have actually raised these charges - according to TelecomTV, Italy recently increased the fees to €9.02 per month; while Spain's went up to €8.32 per month. The UK's rates are between €8.61 and €8.86 per month.
Vodafone Germany's CEO Friedrich Joussen recently told financial weekly Boersen-Zeitung that Vodafone's LTE network would provide sufficient bandwidth to replace DSL and he would look to migrate up to 4m subscribers to a bundle including LTE residential broadband.
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