Germany’s biggest telco Deutsche Telekom has signed a groundbreaking agreement with its main rival Vodafone under which the latter will deliver IPTV services over DT’s broadband lines by the end of the year, as part of efforts to spread the risk of DT’s ambitious new broadband rollout.
Under the preliminary agreement, Vodafone has committed to purchase a certain volume of both VDSL and new vectoring lines which are to be installed by DT as part of its €6bn high-speed broadband rollout, expected to benefit around 24mn homes.
Niek Jan van Damme, head of Deutsche Telekom’s Germany business, said: “We are delighted to have another partner on board in the shape of Vodafone to share the investment risk. This gives us greater certainty of achieving the necessary number of customers for the new network and lets us push ahead with the roll-out.”
The contract signed with Vodafone also defines a new wholesale product: the layer 2 bitstream line, which is handed over to the competitor’s network much closer to the end customer, allowing Vodafone to generate more added value of its own because less network performance is required from Deutsche Telekom.
Vodafone is expected to purchase the conventional layer 3 bitstream line as an interim solution until the new wholesale product – known as layer 2 handover – is implemented.
The cooperation agreement will be submitted to the Federal Network Agency and the Federal Cartel Office for approval. Cooperation is scheduled to start before the end of the year.