The German DSL Market in Q2 / 2007

Figures just released show that the six leading German DSL providers gained roughly another 720,000 customers in Q2 of 2007 - which means Germany now has a total of 16.57 million active DSL users.

The most interesting fact is that Telekom has managed to turn the trend around. This former monopolist had continuously lost market share through 2006 until it dropped below the 50% level, but now it is flexing its muscles again. Among the top six providers, its share went up from 48.20% in Q1 to 48.28% in Q2 of 2007. This seems to be driven by price cuts it introduced when it renamed T-Com as T-Home.

There is some doubt that this slow decline may not have quite halted. Ever more DSL providers are pushing attractive and increasingly accessible packages through their own telecommunications networks or through those of their partners (QSC, Telefonica). This approach is likely to impact customer numbers in the third quarter, whereby 1&1, the second largest DSL provider, only started making such moves in the 3rd quarter.

The providers Freenet, Arcor, 1&1, and Alice are using the DSL resale business, which is declining according to Telekom, only to cover areas in which they have neither their own network nor that of their partners. Only Versatel does not subscribe to this approach to broaden its presence - it is sticking exclusively to its own phone network.

Even with such a single-track strategy the small one among the big boys – Versatel – managed to rack up about 50,000 new customers. This is as much as Freenet DSL, which is surrounded by takeover rumors. In addition to Versatel and Telekom, Arcor is the only other provider that boosted its market share versus the last quarter: with an increase from 13.25% to 13.28%, in a neck and neck race it replaced Alice to take 3rd place in the hierarchy of German providers.