Germany
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Germany |
 Historical
and juridical viewpoint
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In
Germany telecommunication services have in the past been
highly regulated by the German Government through its
Ministry for Post and Telecommunication (BMPT) and
controlled and owned by the Federal Telecommunication and
Postal Offices (Deutsche Bundespost). Mainly due to
external pressure, liberalisation, however, has started
as early as 1989 when satellite transmission and mobile
communication were liberalised. Today Germany has one of the most
liberalised telecommunication markets within the EU. I - Historical and juridical viewpoint The main steps of the regulatory development of the German telecommunication market in 1996 and 1997 are summarised at the end of this report. Below are described the main steps in 1998. 1. Full Liberalisation of Telecommunication At the end of 1997 the German telecommunication market (estimated at about 35 MECU) was dominated by the DTAG with 86 %, the remaining 14 % were divided up as follows (Diebold in Gateway, February 1998):
On January 1, 1998 the German telecommunication market was fully liberalised. The old "Postgesetz" (postal law) has been replaced by the Telecommunication Law (TKG). The new Regulatory Office for Telecommunication and Post has officially started its work. Gerhard Harms has been selected for the German Telecommunication Regulation Office to take the position of the designated vice president Volker Schlegel who has declined the offer. Considerable resentment especially from the new private telcos was caused by the first announcements by the DTAG of fees for pre-selection, transfer to another carrier (same telephone number), and "last mile" access. In each case the initial offer was considered decisively too high for a fair competition. 3. Licensing of Telecommunication Equipment The licensing of telecommunication equipment in Germany was until recently the sole responsibility (and right) of the Federal Office for Posts and Telecommunication (BAPT). On February 18, 1998 the president of the Regulating Office (RegTP) transferred the task of licensing of telecommunication equipment to seven private enterprises. 4. Model of Local Tariffs An analytical model of costs for the local telecommunication network has been developed by a research institute for the regulator (RegTP). The model is to be used to provide a framework for costs of the individual elements of the telephone network of the DTAG. 5. Approval of the raise in CAT Tariffs The German Telekom AG had raised the fees for cable TV from DM 22,50 to DM 25,90 per month in November, 1997. On May 2, 1998 the Regulation Office (RegTP) approved this increase until the end of 1998. The DTAG has been asked to increase their efforts to save costs for this service. 6. Agreement has been reached on the transmittal of the tariff impulse On May 19, 1998 an agreement has been reached between the German Telekom AG and the new competitors on the transmittal of the metering impulse (for the purpose of immediate cost calculation). Until late fall of 1998 it has to be ensured that also for switching calls in PBXs the metering impulse will be available. 7. Graduated tariffs for pre-selection The graduated pre-selection fees submitted by the German Telekom AG (DTAG) on April 4, 1998 have been rejected by the Regulation Office (RegTP). For the sake of processing costs and in the interest of the DTAG the RegTP approves a lower fee than applied for (by the DTAG) on June 15, 1998 The RegTP assumes that the DTAG will be able to modify the pre-selection process so that the approved fees will be sufficient to cover their costs. The anticipated date for the final fee of DM 10 (5 ECU) is January 1, 2000. 8. Regulation Office ceases as licensing organisation for telecommunication equipment Early this year, the RegTP transferred the task of licensing of telecommunication equipment to seven private enterprises. From June 15 1998, the RegTP will cease this activity in agreement with the German Telecommunication Law (TKG). 9. TC Market Development during the first semester of 1998 I the first semester of 1998 the new private telecommunication firms managed to increase their share of the market volume to 7 % which represents a three fold increase over the 1st quarter. The more than 30 newcomers handle already 35 million connection minutes per day out of a total of 480 million daily telephone conversation minutes in Germany. Leaders with about 8 million minutes are Mannesmann Arcor and MobilCom. For long-distance calls the market share has increased to about 12 %. Only about 15 % of the current DTAG customers (3 % of the private households) are considering a change. The main reason for changing carriers is still cost. As far as service, quality, and reliability is concerned the Deutsche Telekom AG (DTAG) is still top rated among all TC providers. Firms that have changed carriers have so far mainly benefited from lower tariffs. They have not noticed any positive changes in e.g. service. Customers are still confused about the various service offers and tariffs and many of them intend to wait until prices have settled. During the first half of 1998 the Deutsche Telekom AG managed - in spite of having to share the telecommunication market with its new competitors - to raise its turnover by 5 % to 34.4 billion DM and its surplus by 18 % to 1.95 billion DM. The number of telephone lines increased to 45,7 million which means an increase of 1.1 % compared with the second half of 1997. Considerable growth came from both ISDN (19 %) and mobile telephony (21 %). T-Online, the online service of DTAG, also registered a plus of 21 % to 2.3 million customers. 10. Fees for ‘Last Mile’ Access Still not Final The Deutsche Telekom AG has withdrawn its fees (DM 47,26) for 'last mile' access which were proposed on June 5,1998 and, then, will have to submit a new offer before November 30,1998. Until then the fee of DM 20,65 fixed by the Regulation Office for Telecommunication and Post (RegTP) will be in effect. 11. Problems with the 0800 Number A mobile telephone provider (First Telecom) had used the tariff free 0800 number to offer its customers a low cost access to the fixed telephone net from mobile telephones. The DTAG said they were losing money as the provider of this 0800 service. Thus, DTAG disconnected the owner of the respective 0800 number (Worldcom) on July 17, 1998. First Telecom had, then, to switch to a more expensive 0130 number. They levied charges against the DTAG in state court of Hamburg. The result was a temporary decree to compel the DTAG to reinstall the 0800 connection. 12. New Telecommunication Services The DTAG announced at the end of June 1998 that it will offer ADLS (Asymmetric Digital Subscriber Line) access as a standard service in at first 8 local service areas. A recently started pilot project in North-Rhine Westphalia is testing these new possibilities. The Deutsche Telekom AG introduces as one of the first carriers world-wide the WDM (Wavelength Division Multiplexing) technology as an operational system in its network. WDM supports the transmission of extremely high data volumes using existing fibre optical networks. Until the year 2000 at least 30 network segments will be implemented. 13. Internet Use Still Expensive In the first semester of 1998, several complaints have been submitted to the Regulation Office for Telecommunication and Post (RegTP) concerning the cost of using the Internet. In particular the grievance is with the high tariff the Deutsche Telekom AG charges for local calls necessary for reaching an entry point. With increasing competition from new Internet providers, partially belonging to the new telecommunications carriers, this situation could improve in the near future. The RegTP is still examining the situation. No action has been announced so far. II - Changes and adjustments over the last three months (October-December 1998) 1. Start of T-DAB Introduction The Regulation Office for Telecommunication and Posts (RegTP) fixed the procedure for granting frequencies for terrestrial digital audio broadcasting (T-DAB). Starting October 1st , 1998 licenses for frequencies will be granted using a two step procedure. In a first step frequencies will be granted on application. In case of competing applications a call for bids followed by a selection of the most suited bid will be used. 2. Interconnection Decision Substantiated On November 5, 1998 the court for administration of Cologne rejected the suit of the Deutsche Telekom AG against the interconnection decision. This substantiates the decision the former Federal Ministry of Posts and Telecommunication (BMPT) made in May 28, 1997 namely that the German Telecom has to grant access to the ‘last mile’ to its competitors without bundling. 3. Decision on Interconnection Compensation Again Delayed Shortly before the deadline November 30, 1998, the Deutsche Telekom AG withdrew the application for interconnection charges. As a consequence the Regulation Office for Telecommunication and Posts had to postpone their decision on the final interconnection compensation the DTAG can charge to their competitors. The temporary interconnection fees of DM 20.65 will remain in force till April 30, 1999. During the 2nd half of 1998, the German telecommunication market has been quite active. The battle for a share in the fixed network market is becoming increasingly harder. Prices for long distance telephone calls are tumbling. Milestones of the latest development have been:
1. Wireless Local Loop Application Allowed On June 9, 1998 the Regulation Office (RegTP) has decided to grant the rights to operate wireless local loop connections. It is felt that a sufficient number of frequencies will be available. Applications for frequency allocations can be started immediately. The official start for applications has been set for July 10, 1998. The wireless local loop access will enable the wireless transmission of telephone services as a minimal offer according to the minimal service regulation. In addition it will be possible to realise modern broadband services such as fast data transmission. This will increase competition for providing direct access to the customer (the last mile). As of June 1998 more than 150 licenses have been assigned in the classes 3 and 4. In the reporting period 19 additional firms have received class 3 licenses and 26 class 4 licenses. It is now possible to obtain a personal telephone number, valid for both fixed network and mobile telephones, no matter where a person moves to in Germany. But, with the granting of a personal telephone number the receiver has no guaranty at this time that he or she will actually be able to use this number. Today Germany's telecommunication providers have not yet implemented this convenient feature. The technical aspects (e.g. interconnection, network spanning solutions, tariffs) of this kind of a service are still unresolved. The Federal Office for Posts and Telecommunication is currently accepting applications for new free-phone numbers which are being changed from the old 0130 coding to the new internationally used (0)800 prefix. About 40 000 applications have been received by the BAPT by September 15, 1997. This date marks the end of a 3 month period which was set to treat all incoming applications arriving at that one date, i.e. they will all have the same chance to receive the phone number they request. Application can continue after this date on a first come first served basis. 5. Change in Ownership of CATV The commissioner for competition of the European Commission (Karel van Miert) is requesting the Deutsche Telekom AG to reach a clear separation from its cable TV networks. So far the DATG has announced that it will move its CATV business to regional enterprises which are supposed to be independent. Whether this will satisfy the EC will have to be seen. There are rumours that the Deutsche Bank is showing interest in the CATV business of the DTAG. IV - Milestones of the German TC Market The following table summarises the main steps in the regulation development of the German telecommunication market. 1. Changes prior to 1996
2. Changes in 1996
4. Changes during 1998 (until September 1998)
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