The German DSL Market in Q4 / 2008

As during the whole of last year, market leader T-Home was again able to win by far the most new costumers. After Deutsche Telekom had passed the mark of 10 million DSL customers, the number of T-Home connections has further climbed by 394.000 to nearly 10.6 million. This means that T-Home still provides about every second DSL connection in Germany.

The highest percental growth lay with the joint venture of Vodafone and Arcor. In the course of the fourth quarter, the number of connections provided by Vodafone and his subsidiary rose by about 123.000. At the turn of the year, both providers together had just under 3 million customers. Meanwhile, Arcor's days as independent brand are numbered: This year, Arcor is going to be wholly integrated into Vodafone.

After the weak performance during the last quarter, the DSL branch of 1&1 took up some speed again. With a net win of 40.000 connections, the number of new customers was about double that of the 3rd quarter. Despite the noticeable rebound, this was nevertheless a rather disappointing result for the provider who originally aimed for 60.000 new customers. The net loss of 108 million euro for 1&1's parent company United Internet, however, was due to other factors. While the DSL branch was able to reach an EBT of 50.4 million, the internet portals belonging to United Internet were hit hard by the drop in online advertising sales. Another factor were write-offs for previous investments in various smaller competitors - among them Freenet and Versatel.

While the final months of the year brought a slight push in sales for most german providers, Versatel had to settle for 6.800 new customers, about 3.800 less than in the preceding quarter. Although it should be noted, that by it's own account, Versatel doesn't even aim for the highest possible customer growth, but wants to concentrate on especially profitable customers and tries to lower its operating costs by using the infrastructure of the cable providers it managed to acquire during the last months.

The long-planned sale of Freenet's DSL branch still didn't go through. Now it seems as if Freenet is attempting to polish the - officially abandoned - branch for potential buyers. Due to a clean-up of the existing customer base and the implementation of stricter criteria for the acquisition of customers, the number of DSL connections provided by Freenet sank by 110.000 to now 943.000. Freenet still wants to part from its DSL business, but not at any price. Should no buyer be found who is willing to pay an appropriate sum, according to chief financial officer Axel Krieger, there's still the option to just keep the DSL branch.

After the customer losses of the last two quarters, Alice DSL was able to score a net-win in customers. Unlike the majority of providers, that was able to at least slighty built upon their existing customer base, Alice has effectively lost customers this year.

Alternative broadband providers show steady growth

The German cable internet providers, on the other hand, managed to gain high numbers of new customers all year. During the fourth quarter, about 77.000 new customers turned to one of the broadband products of Kabel Deutschland, Unitymedia registered 51.000 new customers and even at Kabel BW, the smallest of the big three cable providers, the number of customers increased by 32.000. With about 1.4 million customers in total, the broadband access through cable may not be that widespread yet, but this year alone the cable providers intend to spend about 700 million euro for the expansion and upgrading of their infrastructure.

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DSLWEB Breitband Report Deutschland