German Telcos Predict Mergers and Stronger Cooperation in 2009—Report
Citing observers within the industry, Frankfurther Allgemeine Zeitung reports that the German telecoms sector expects mergers and stronger cooperation between the companies from this year. In particular, the pundits predict increasing collaboration between alternative fixed-line operators—but also between the alternatives and incumbent Deutsche Telekom—and mergers including telcos and cable network operators. As a timely example, the newspaper names the five alternative IPSs—Hansenet, Telefónica O2, EWE TEL, Versatel, and QSC—which are going to meet on 22 January for discussions on partnerships regarding broadband roll-outs.
Significance: The views reflect two ongoing trends on the German broadband space—market consolidation and deployment cooperation. The former process has been somewhat held back by certain impacts of financial crisis, particularly firms' limited access to credit and shrunken share prices, but there will nevertheless be further integration in the course of 2009, with especially cable operators, of which networks start to be up to date in terms of broadband capability, increasing their importance. As for the cooperative aspects, the alternative telcos are willing to expand the coverage of their own infrastructures and see partnerships with rivals as a substantial means for making this more cost efficient; Deutsche Telekom, for its part, has also indicated that it would be ready for further collaboration, particularly when it comes to expanding VDSL networks.