Deutsche Telekom Pledges £24bn For German Fibre And LTE

German consumers are set to benefit after Deutsche Telekom announced a mammoth investment programme for superfast broadband.

The firm has announced it will invest almost 30 billion euros (£24bn) over the next three years in order to ensure “the future of telecommunications.”

German Investment

Unlike in the UK where BT has shied away from the mainstream deployment of wireless technologies such as LTE, Deutsche Telekom (DT) is adopting a combination of both fixed-line and wireless technologies to ensure that the majority of Germans gain superfast broadband connectivity as quickly as possible.

So what exactly is DT proposing to spend all this money on?

Well the German operator has pledged to spend a whopping 6 billion euros (£4.8bn) on a superfast broadband roll-out in Germany itself, using fibre-to-the-cabinet (FTTC) and vectoring.

It will also accelerate the building of a nationwide LTE network, that it hopes to cover 85 percent of the German population by 2016. This LTE network alone will give Germans internet connections speeds around the 150 Mbps mark.

The fixed-line FTTC network meanwhile will be rolled out to 65 percent of the German population, within the same timeframe.

DT will also deploy new vectoring technology, provided there is a corresponding regulatory framework in place, which will apparently increase VDSL data transmission rates to up to 100 Mbps.

“In future, innovative hybrid-box technology will feed traffic in both directions via vectoring and LTE. This will make download speeds of up to 200 Mbps possible and upload speeds of up to 90 Mbps,” said DT.

Vectoring technology is essentially a way for telcos to avoid investing in an extensive fibre roll-out, as it uses noise cancellation to increase data speeds on existing copper networks. DT also pledged to spend $4bn building an LTE network in the United States.

Safeguarding The Future

The chairman of DT explained how it was now absolutely necessary to invest heavily in its core infrastructure, in order to safeguard its business for the future.

“Hesitation now means playing catch-up later,” said René Obermann, Chairman of the Board of Management of Deutsche Telekom. “We are investing in the future – with resolve and a clear strategy.”

“The investment plans we have presented today will lay the foundation for future growth,” said Obermann. “And it is the people in Germany in particular who will benefit more than ever from the modern infrastructure.”

The German approach differs markedly from the UK, where BT is investing £2.5bn to roll out fibre (mostly FTTC) to 66 percent of the UK by the spring of 2014. The British government meanwhile hopes that its BDUK scheme, into which it has only invested a modest £530m, will be sufficient to extend this fibre deployment to the most of the final third, and allow the UK to boast of having the best broadband in Europe by 2015.

Expert Take

However some experts are warning against overly simplistic comparisons between the UK and Germany.

“The €30bn investment by Deutsche Telekom would appear to eclipse what BT via Openreach is investing in fibre broadband which is just £2.5bn, but closer inspection reveals that this spending is spread across several countries and also includes increasing their LTE coverage,” said Andrew Ferguson of Thinkbroadband.com.

“In comparison to Openreach in UK, the investment appears to be €6bn on FTTC (VDSL2) with the deployment of vectoring (vectoring boosts VDSL2 speeds by mitigating some of the crosstalk),” added Ferguson. “While they are spending almost double what Openreach is, they are still going to arrive at the same coverage levels Openreach plan (Openreach 2/3rds of UK, Deutsche Telekom 65 percent). The roll-out also appears to only cover FTTC, where Openreach should at project completion have around 5 to 10 percent of UK homes in the position where their superfast broadband option is a pure fibre (FTTH) solution, and with the Fibre on Demand option due in 2013, the other premises passed by just FTTC will get the option to order a full fibre connection.”

And Ferguson warned that vectoring does extend the life of copper networks, it does add complexity.

“Vectoring while boosting broadband speeds does add to the complexity, which makes it harder for other providers to deploy their own competing FTTC situation,” he said. “Vectoring requires the active hardware from two competing suppliers to actually communicate so that the vectoring technology can work.”

“The LTE coverage is also behind the UK, so while Germany is ahead currently on LTE deployment, so long as UK providers meet their auction obligations we should in a couple of years have 4G LTE coverage to 98 percent of households,” said Ferguson. “The speed figures we have seen mentioned for the Deutsche Telekom LTE rollout of 150 Mbps seem very optimistic and while LTE can achieve those speeds it would be very rare to see in the real world.”

“It seems reasonable to say that the UK actually is going to have a much better broadband landscape once these roll-outs finish,” said Ferguson.

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