The German DSL Market in Q2 / 2008
DSLWEB Special, August 2008
In the second quarter of this year, the total number of DSL connections with the six leading providers in Germany increased again. However, since the first quarter of 2008, there has been a continuing decline in the number of new connections. New connections have gone down to about 460,000 from 910,000 in the fourth quarter of 2007.
Therefore it is no surprise that the first providers are beginning to increasingly address customers who are willing to change their provider with special offers. The increasing market saturation could soon lead to a noticeable shift from business with new customers to a market that is characterised more strongly by changes of providers.
The second quarter of 2008 brought a remarkable change to the German broadband market: with the complete acquisition of Arcor, Vodafone has managed to knock 1&1 off the second place in the provider ranking. What the takeover will mean for the future of the Arcor brand remains to be seen. A report in Manager Magazin has fuelled rumours that Arcor will get completely incorporated into the Vodafone brand in the first half of 2009.
According to a statement by Friedrich Joussen, the CEO of Vodafone Germany, the company is currently aiming for a market share of 20 percent. As long as the Arcor brand can contribute to this aim, says Joussen, it will be kept alive. But since Vodafone was able to conclude far more new DSL contracts in the past months than its subsidiary, the question is how long Arcor will still be able to exist independently.
In addition, Vodafone has shown interest in the DSL division of Freenet AG, which currently is for sale. Meanwhile Freenet’s decline in this sector continued: After the company had already been struggling with customer attrition in the previous quarters, the number of Freenet DSL customers went down by another 90,000 in the last quarter. Alice DSL has also started to suffer from decreasing customer numbers. While the HanseNet subsidiary could at least register a moderate increase in customer numbers at the end of the last quarter, a net loss of 9,000 connections has now led to a decrease in customers for the first time.
For Deutsche Telekom, the introduction of the IP bitstream mainly meant significant losses with respect to telephone connections, since many former DSL resale customers changed to all-inclusive packages of alternative providers. In contrast, T-Home was once more able to post rapid growth in the broadband sector with 340,000 new connections and was already close to reaching the mark of 10 million broadband connections by the end of the first half of the year.
Another trend that is becoming more and more noticeable is the increasing significance of the large cable Internet providers on the broadband market. In comparison to the leading broadband providers, Unitymedia, Kabel BW and Kabel Deutschland now altogether have a market share of just over five percent. This is whetting the appetite of some: after buying the small Berlin-based cable operator AKF Telekabel in July, Versatel are now checking whether it would be possible to further strengthen their market position by taking over a well-known cable provider.
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