Q1 2012: DSL segment stagnates, high demand for cable internet continues

As in the last quarter of 2011, the total number of DSL subscriptions with the four largest German DSL providers increased only slightly during the course of Q1 2012. Taken together, they registered a net increase of about 29,300 DSL subscriptions. The three major German cable operators, on the other hand, fared noticeably better once again and were able to accumulated 188,100 additional internet customers. The total number of fixed-line broadband connections in Germany reached 27.1 million by the end of Q1.

DSL providers: Telekom's competitors are losing ground

The customer figures for Q1 2012 do nothing but confirm the general trend for the German DSL market: While the undisputed market leader Telekom continues to build on its existing DSL customer base, the direct competition in the DSL sector struggles with stagnating subscription numbers. On March 31st, the four largest German DSL providers combined 21.5 million active DSL lines.

Not included in the total above are the remaining Versatel DSL customers: After a so-called "squeeze-out" of minority shareholders, the Victorian Fibre Holding GmbH took full control of Versatel AG, which has subsequently been delisted from the stock market. As Versatel in turn is no longer obligated to publish quarterly records, there are currently no exact figures for Q1 2012 available. But as the company reportedly wants to shift its focus even more towards the business and wholesale sectors, the already dwindling retail segment will almost inevitably continue to lose relevance on the overall market.

In the traditionally strong first quarter of the year, customer acquisition at Telekom gained additional momentum once again. After the market leader recorded a net gain of 102,000 new DSL subscriptions, the total number of DSL connections provided by Telekom reached 12.4 million by the end of March.

Vodafone had already been suffering continuous line losses since the start of 2009, even if the customer churn had slowed down considerably during the second half of 2011. In Q1 2012, however, the company had to take the biggest hit yet in terms of its DSL customer base which dropped by 42,000 to 3.39 million. The fixed-line segment of o2 found itself in a very similar situation . Not only had its DSL customer number also been in decline for the last two quarters, the downward trend likewise intensified at the beginning of the new year. As a result, the number of o2 DSL customers shrunk by 40,700 during Q1 2012 to a total of 2.55 million.

1&1 meanwhile experienced a slight upturn: After the subsidiary of United Internet had not been able to expand its DSL subscription base for more than one year, the Q1 2012 finally brought the first small net increase (+ 10,000 DSL subscriptions) since mid-2009.

While the customer numbers of the regular DSL providers are stagnating, the major German cable internet providers continue to deliver strong growth. In Q1 2012, Unitymedia gained the most new internet customers and increased its internet subscription base by 78,900 to 1.105 million - the highest number of new subscriptions during a single quarter for Unitymedia to date. The number of internet subscriptions with Kabel Deutschland, Germany's largest cable operator, meanwhile climbed by similarly impressive 72,200 to slightly more than 1.5 million.

Due to adapting the reporting guidelines of its new owner Liberty Global, Kabel BW had to adjust its reported total of internet subscriptions slightly downward in Q4 2011. A glance at the current report, however, confirms that the influx of new customers has not actually suffered. At the end of Q1 2012, Kabel BW provided a total of 804,000 broadband internet connections, which constitutes an increase by 37,000 during the three-month period from January through March.

After Unitymedia as well as Kabel BW have been taken over by the American media company Liberty Global in the course of the last two years, the next big takeover on the German cable market is already looming on the horizon. On May 21st, Kabel Deutschland announced the acquisition of the regional cable provider Tele Columbus. The deal, however, is subject to the approval by the German Federal Cartell Office, whose decision is not expected until the end of the year.

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