Network & infrastructure expansion.

  • Around EUR 10 billion invested in broadband expansion in Germany between 2010 and 2012.
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  • More than 1,100 collaborations have been agreed for broadband expansion Germany.
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  • Telekom recognized as Mobile Network Operator of the Year for the twelfth time in a row.
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Digital networking is one of the main trends in the modern information society. Full broadband coverage is becoming a key requirement for participating in society. However, many people have no or only limited access to this technology, especially in rural areas. There is a digital divide in our society. Our efforts in the CR category "Connect the Unconnected" are therefore focused on using new technologies to cover new regions.

Today, as a result of high-performance standards, top data transmission speeds are provided even in remote areas:

The network infrastructure is at the heart of our business. Telekom builds and operates networks that meet the high requirements of the gigabit society. The Group's extensive network expansion strategy, which was approved in July 2010, discusses the steps Telekom is planning to take in the medium term on its way to creating the network of the future. The main objectives are growth, efficiency and quality.

Network expansion in line with political goals.

Telekom supports the network expansion goals of the EU Commission and the German government. We plan to provide high-speed Internet access to as many households as possible mainly in rural areas of Germany that do not yet have coverage. We are primarily relying on the Long Term Evolution (LTE) standard to help us achieve this goal. Together with the fixed-line standards ADSL, ADSL2+ and VDSL. LTE will be a key component in future ICT solutions. We are pushing the development and expansion of fast networks in all the markets where we are active.

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The European Commission passed a Digital Agenda in May 2010 as part of its Europe 2020 strategy in order to create the necessary conditions for economic growth in Europe. This agenda specifies that all Europeans will be able to surf online at speeds of at least 30 Mbit/s by the year 2020. Connections enabling at least 100 Mbit/s should be available to half of all European households by that year.

In line with the EU's digital agenda, the German government decided to pursue a similar goal with its broadband strategy, which it passed in 2009. It requires network access with speeds of at least 50 Mbit/s for all households by 2014, giving priority to infrastructure expansion in rural areas. Deutsche Telekom is one of the most important partners of this broadband strategy and contributes significantly to fulfilling the German federal government's broadband objectives.

More than EUR 10 billion in investments in broadband expansion.

Telekom's total investments in broadband expansion in Germany from 2010 to 2012 will come to around EUR 10 billion, including those made for fiber optic networks, new mobile communications technology and IT processes. That makes Telekom in Germany the largest investor when it comes to providing broadband access.

In 2010 we invested an additional EUR 1.3 billion in LTE frequencies and are now able to use the digital dividend to provide broadband services.

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The Group will be able to tap significant growth opportunities with the network expansion strategy. In order to take advantage of these opportunities, Telekom needs to rethink its current business model, which consists of the following:

1. The network factory.
Our business is based on the network infrastructure and this will remain so. To update the infrastructure, we are planning to change entirely over to all-IP  technology in the next few years. Fixed and mobile networks will be fully integrated. The aim will not only be to provide high bandwidths but also top quality and the best possible service experience to our customers.

2. Toolkit of standard services.
The second component consists of modern, highly efficient and standardized IT systems. Telekom currently operates thousands of IT systems. The plan is to reduce, simplify and update these systems. This will save money while improving the quality, flexibility and speed of our services.

3. Content and services for customers.
The third element of our strategy is our enabling services which, with the help of ICT, enable providers from areas such as healthcare, energy or media distribution to expand their services or make them more customized. By doing so, we enable our customers to become more efficient as well as more growth and customer-oriented.

Our network and IT capabilities will be combined to create a toolkit of standard services. This will apply to our products as well as to the option of integrating our services into third-party services, such as those provided by companies and software developers, by using standardized interfaces. This toolkit will be a springboard for new business models and sales opportunities. With it, we will enable our partners to develop innovative solutions while participating in the process at the same time.

Telekom helps business customers bring their content and services to the customer. For example, Telekom provides its partners with state-of-the-art billing models, installs modern access management systems and guarantees high service quality.

More Broadband for Germany project

Telekom also continued its cooperation with local communities in the More Broadband for Germany project in 2011 within the scope of bid processes. In those areas where broadband expansion may not be economically feasible, support from public funding is a viable option. For example, communities could provide existing conduits that are not in use, perform the civil engineering work required or participate in a network expansion project by making a financial contribution. More than 3,000 communities have been receiving broadband infrastructure through these means since 2008.

In 2011 we entered into more than 1,100 collaborations for broadband expansion following some 800 in 2010.

Each project generally involved a town or village. The most popular technology of choice was fixed-line DSL. We have been relying more heavily on a mix of fixed-line, mobile and radio relay system communications in our network expansion activities since 2010.

We will continue to make investments in broadband expansion in 2012 as well and expect to be involved in collaborations of around the same scope as those in 2011. We will now rely more heavily on a technology which offers higher bandwidths, namely VDSL . Telekom has been using VDSL  technology with bandwidths of up to 50 Mbit/s in rural areas as well since 2011. This expansion will continue throughout 2012.

CR Report from the previous year

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The fundamental part of broadband-based high-speed Internet is a fiber optic network. Expanding the fiber-optic infrastructure to achieve blanket coverage goes hand in hand with tremendous financial expense. Experts estimate EUR 40 to 50 billion in Germany alone. The more remote the communities, the higher the costs. Reasons for this include the necessary civil engineering works, which can cost up to EUR 70,000 per kilometer.

Blanket coverage calls for cooperation.
Telekom will not be able to afford to finance blanket coverage under financially viable conditions by itself. Even in Germany, where we have a share of around fifty percent of the broadband market, we will only be able to manage this task in collaboration with our competitors. That is why we encourage German and European government offices to provide sufficient incentive to secure the necessary industry-wide participation of all ICT network operators.

Cooperating with communities.
Broadband expansion in many rural communities is not financially viable due to the low number of potential customers and high investment costs. In these cases, Telekom has been working in partnerships—since late 2007 in DSL network expansion and since 2011 by setting up a VDSL network. The company informs the communities about the costs and offers them various collaborative options:

  • Use of the communities' existing cable duct systems or unused conduits to reduce civil engineering costs
  • Local authorities taking on tasks such as conducting civil engineering works
  • Providing advice in applying for possible subsidies

High-speed Internet access is an important factor in making a location attractive. The German Association of Towns and Municipalities (DStGB) published a guideline entitled "More Broadband for Germany" to inform decision-makers at local authorities of the possibilities and potential of broadband expansion. Deutsche Telekom contributed a series of expert articles to this publication. In doing so, the company is fulfilling its obligation to keep people informed and provide them with access to the information society.

Download : Mehr Breitband für Deutschland (More Broadband for Germany – only available in German)

Fiber-optic expansion in Germany.

Deutsche Telekom intends to continue to expand its high-speed network over the next few years, laying the foundation for the gigabit society. This network of the future will give our customers in Germany high-speed access to the Internet, Entertain offerings and multimedia applications in unheard-of speed, variety and quality. We are specifically looking to cooperate with the housing industry in our expansion activities. Homeowners who agree to the expansion can expect the value of their property to increase considerably as a result of FTTH cable provision.

Deutsche Telekom embarked on a trend-setting collaboration in the area of ICT infrastructure with Deutsche Annington Immobilien AG (DAIG). The two partners gave the go-ahead for a fiber optic connection of around 171,000 homes managed by the DAIG nationwide in March 2011. In several steps, Deutsche Telekom will provide DAIG-managed buildings at approximately 600 locations with high-speed broadband connection at competitive prices. In a first step, 42,000 DAIG homes in North-Rhine Westphalia will be given access to the new network.

CR Report from the previous year 

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Deutsche Telekom employs the Fiber  to the Home (FTTH) concept when expanding its fiber optic network. That means we will be laying fiber optic cables all the way to the customer's home. In this way, by using GPON (Gigabit Passive Optical Networks) technology, it is now possible to use the high-speed potential of fiber optic technology to its fullest: access of up to 2.5 Gbit/s of download speed and up to 1 Gbit/s of upload speed have now become feasible.

Fiber  optics is the fastest data transmission medium. One of our goals therefore is to directly connect a large number of households to the fiber optic network in 2012.

Using synergy effects for FTTH expansion.

Costs reduction potential and synergy effects can be realized and risks can be dispersed when installing new fiber optic networks based on network expansion collaborations. That is why we are open to collaboration and are reviewing all forms of cooperation in both the fixed-line and mobile communications areas.

The range of possibilities covers options such as marketing collaboration, renting complete, passive access networks, and joint ventures (joint regional companies founded with local utilities companies, special purpose associations or other partners). Telekom also launched the More Fiber  Optics for Germany initiative. The goal is to further local fiber optic expansion in collaboration with communities and local utilities companies using a standardized expansion and business model.

Agreements with local competitors regarding mutual guarantee of network access (open access) play a role here as well, because such agreements can prevent double investment. We also offer special terms and conditions packages to enable pure service providers (resellers that do not have their own network) to participate in the expansion costs and risks involved in new networks.

Migration to all-IP.

We are planning to change our entire network over to an all-IP  infrastructure in the next few years. With this step, fixed network and mobile communications will be comprehensively integrated in a next generation network based on the Internet Protocol (IP ). Numerous IT systems will be simplified and updated for this purpose.

Many people already use IP-based solutions to organize their day-to-day lives conveniently and individually. We are constantly improving our offer of fast mobile communications and fixed-line connections to lay the foundation for this change. The voice and data service platforms, which are currently separate, will be integrated onto a standardized platform over the course of the all-IP  migration. This should help reduce energy consumption considerably.

A functional Internet infrastructure is based on a number of innovative technologies whose development is influenced by our planning processes. The all-IP  migration and the demand for increasingly faster bandwidths provide impetus for the provision of new, efficient technologies when it comes to data transport or individual network access. Together with changing customer demands and new ways of using technology, they are the force behind our efforts to restructure and update the network.

In 2012 we started with the preparations for the implementation of the new Broadband Network Gateway (BNG) technology approach. The BNG allows us to reduce network complexity through a more streamlined architecture.

It enables us to reduce the number of network elements, creating savings potential in network operation and reducing investment costs as well as energy requirements.

Award for mobile communications network in Germany.

In 2011 we received significant awards for Telekom Deutschland's mobile communications network. The German consumer organization Stiftung Warentest recognized our excellent network availability, said that we had the highest data rates and rated our service as "good" (a score of 2.4 with 1 being the highest).

This was followed by a test involving extensive measurements conducted by the trade portal, CHIP online, in which we received first place. We also came in first in the test conducted by the trade magazine, connect. We were ranked far ahead of the competition in both tests.

The judges particularly praised the quality of the network expansion, which is based on innovative technologies. The 2nd carrier and dual cell function was activated at all sites by September 2011. That means that data rates of up to 42 Mbit/s are now possible thanks to blanket coverage provision of a second carrier frequency in the UMTS network.

Mobile Network Operator of the Year for the twelfth time.

Readers of the "connect" trade journal voted Telekom "Mobile Network Operator of the Year" for the twelfth time in a row in May 2011. Furthermore, services in the areas of IPTV (Entertain), Internet and phone as well as virtual PABXs (Telekom DeutschlandLAN) were especially praised. We came in first in all of these areas.

The tests evaluated a total of 25 categories. The results for Telekom Entertain were particularly impressive: Telekom's IP-TV-offer with phone, Internet and digital TV was voted the best TV offer by 60 percent of test participants. connect readers also expressed their satisfaction with Telekom's combined phone and Internet offers such as Telekom's Call & Surf rate: 27.9 voted for Telekom as the best provider in the Internet & Phone category. DeutschlandLAN, an integrated solution for IT services, was voted best virtual PBX system in the business customers category.

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