Archive notice: This article was originally published on December 31, 2007. Links and embedded videos are preserved as part of the historical record.
The fixed-line market was opened at the beginning of 1998. From 1997 to 2007, telecommunications providers in Germany increased their revenue by 61 percent to 64.8 billion euros. “Not only mobile communications contributed to this boom, but also the opening of the fixed-line market,” Scheer explains.
With call-by-call and new providers with their own networks, the market began to move in 1998. Shortly after liberalization, there were already more than 1,000 service and network providers in Germany; today there are more than 2,300. “Without liberalization, telecommunications would not have developed nearly as dynamically,” emphasizes BITKOM President Prof. Scheer. “In these ten years, the industry laid the technological foundation for the Internet boom.”
Since then, customers have benefited from many technological innovations and steadily falling prices. “A domestic daytime call still cost 31 cents per minute in 1997,” Scheer compares, “today the same service is available for one cent.” Prices for international calls on fixed lines have fallen even more rapidly: Germans can now use call-by-call to phone the USA for one cent per minute; ten years ago the price was 74 cents (source: Federal Network Agency).
“In this price competition, customers are the clear winners,” comments BITKOM President Prof. Scheer. Competition among providers is not the only factor ensuring low rates. Internet telephony and increasingly inexpensive mobile communications are also putting fixed lines under price pressure. Revenue from both mobile and fixed-line calls therefore fell in 2007. “Although more phone calls are being made than ever before, the rising call volume cannot currently offset the decline in prices,” Scheer explains.
There is particular momentum in data services. In 2008, half of all households will have high-speed Internet access via DSL or TV cable. Revenue from fixed-line data services is rising accordingly by seven percent this year to 12.4 billion euros. BITKOM expects a further increase of 6.5 percent in 2008.
“Today, everyone must be able to find a connection to the digital age,” BITKOM President Prof. Scheer demands with regard to some rural regions where broadband connections cannot currently be installed cost-effectively. “Where DSL expansion is too expensive, it must be permitted to use TV frequencies that become available for broadband provision.” People could then dial into the Internet at high speed by radio. The corresponding infrastructures can be built much more cheaply than cable networks. “But for this we need the support of the federal and state governments,” Scheer explains. “We want the responsible politicians to enable the allocation of the necessary frequencies as quickly as possible.” This was the royal road when it came to avoiding the emerging digital divide in Germany.
