8. November 2011
Since the highs of 2005, total market revenues for voice and data communications services have been heading south (telecommunications as a whole down 12.4% from 2005 to 2011). The decline is attributable to lower revenues on fixed-line and mobile services (fixed-line down 15.3% and mobile down 14.9% from 2005 to 2011). This is a result of the relentless intensification of competition – not only between the telecommunications providers themselves but also between those providers and the providers of substitute communications technologies (e.g. broadband TV, powerline and satellite). One aspect certainly worth noting in this connection is the significant climb in broadband TV revenues (2005-2011: up 72.7%). The general trend is due to the liberalisation and deregulation of the telecommunications market that was initiated over 10 years ago.
The telecommunications business is undergoing a major metamorphosis: cheap package offers with flatrates are to be found everywhere. But what is a hit with end-consumers is currently a source of headaches for the sector’s business managers. After all, German and European policymakers have declared ambitious targets for the development of a modern broadband communications network. They say that some 75% of Germany’s 40 million households should enjoy 50 Mbit/s internet access by 2015, and no less than 100% of them by 2018. These lofty goals for the expansion of Germany’s broadband network are linked with investments worth over EUR 40 bn. As revenue volumes in the traditional telecommunications markets are shrinking, both politicians and the private sector are currently seeking ways in which this expansion can be carried out that are ultimately cost efficient.
For more information:
Netzneutralität: Innovation und Differenzierung keine Antipoden. Deutsche Bank Research, E-conomics 86. 25.8.2011.
Broadband investment a major challenge Deutsche Bank Research, Chart in focus, May 17, 2011.
Broadband infrastructure: The regulatory framework, market transparency and risk-sharing partnerships are the key factors. Deutsche Bank Research, E-conomics 77. May 26, 2010.