At the end of the second quarter of 2011, the number of fixed-line broadband connections in Germany totaled 26.7 million. The three big German cable providers once again demonstrated the highest growth rates for the quarter. Combined, they reached a net increase of 145,400 customers for their internet products. The growth of the DSL providers meanwhile has increasingly diminished: In Q2 2011, the top five DSL providers have won only 42.4000 additional DSL contracts.
DSL customer growth almost coming to a standstill
The five major German DSL providers finished the quarter with a combined total of 22.034 million active DSL connections and therefore continue to provide the vast majority of fixed-line broadband connections in Germany. The small net increase of 42,400 new customers (+140,000 in Q1 2011), however, translates to a DSL customer growth of just 0.19 percent over the previous quarter. With this, the growth rate of the Big Five has reached its lowest level so far.
Customer churn at 1&1 and Vodafone continues
In the wake of the line losses during the first quarter 2011, the number of DSL connections provided by 1&1 and Vodafone has dwindled further. At 1&1, the net loss climbed even higher than in the previous quarter and rose from 20,000 to 30,000 lost DSL subscriptions. With this, the DSL provider has now been suffering effective line losses for five consecutive quarters. For the largest part, however, 1&1 lost resale connections leased from Deutsche Telekom, the number of the significantly more lucrative DSL packages meanwhile increased by 40,000 to 2.41 millions. The line losses also continued at Vodafone, albeit at a lower rate. After Vodafone had to announce a loss of 24,000 DSL subscriptions for the first time in Q1 2011, it lost 21,000 additional connections in Q2 2011.
The number of regular Versatel DSL customers has been continuously declining for two years by now. Only the inclusion of some 16,000 small business customers into the newly-created reporting segment "mass market" led to a nominal increase at the beginning of the year. After this one-time effect, the decline continued unabated and the number of private customers at Versatel dropped by 19,800 to 602,600. In all likelihood, this trend will continue in the coming months because the company is currently fully focused on restructuring itself into a B2B provider. The business customer and wholesale segments have already been announced by Vodafone as its new core businesses.
Once again, Telekom and o2 come out on top
Like in Q1 2011, out of the major DSL providers, only market leader Deutsche Telekom and Telefonica Germany with its brands o2 and Alice were able to acquire additional DSL subscriptions. Their growth, however, has significantly slowed down in Q2 2011. Instead of the approximately 115,000 new connections it had activated in Q1 2011, Telekom gained only 84 000 additional DSL connections in the time between April 1st and June 30th. o2 and Alice were able to secure a total of 29,200 new DSL customers in Q2 2011, but in the previous quarter, the influx of DSL customers had been twice as high.
While the fixed line business has stagnated - at least for the traditional DSL providers -, the mobile internet has become increasingly important. Even within the mobile sector, the data services occupy a special position as key growth driver: At Vodafone, for example, mobile internet services already provide for a quarter of all mobile revenues, at the competitor o2, data revenues even constitute 40 percent of all mobile revenues.
As in the fixed-line segment, the revenues from voice services are also declining in the mobile sector. Especially the reduction of termination fees by the Bundesnetzagentur (Federal Network Agency), which had come into effect retroactively from December 2010, has had a strong negative impact on mobile revenues. As a direct result, the average monthly revenue per Vodafone mobile customer has plummeted by 50 cents to 15.30 euro compared to the previous year. At o2, the average revenue per mobile customer dropped by 8.1 percent to 13.90 €/month. Only the strong increase in mobile data revenues prevented a more dramatic drop.
The three big German cable operators Kabel Deutschland, Unitymedia and Kabel BW completed Q2 2011 with a net increase of 143,500 internet customers and were therefore able to wrestle additional market shares from the DSL providers. Together, the three companies provide a total of nearly 2.95 million broadband internet connections and have attained a combined market share of around 11 perent.
While the DSL providers have just started to really push their own television services - with a total of 1.3 million subscriptions to its online-TV Telekom Entertain, market leader Deutsche Telekom is pioneering in this field -, the cable operators, on the other hand, have already successfully established themselves as alternative providers of internet and telephone services. A look into the revenue figures published by Kabel Deutschland shows how crucial these new services have really become for the cable providers. According to the official numbers, the average revenue per customer that is generated by the basic cable subscription and optional pay-tv packages amounts to only 9.70 €/month. Meanwhile, the internet and telephone segment generates a monthly average of 28.29 euro per customer.
The percentage of cable customers who use internet via cable is steadily increasing. With 31 percent the portion of cable internet customers is especially large at Kabel BW. Unitymedia provides 19.5 percent of its total customer base with broadband internet and Kabel Deutschland ranks lowest with an internet penetration rate of around 12 percent.
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