Summary
Our discussion paper analyses the development of supply and competition on the German fixed network market in the period from 2017 to 2020. We investigate the retail price development of double-play tariffs (internet + phone) for private end users, taking into account the marketed bandwidths (which are assigned to bandwidth classes) and the technologies used (xDSL, FTTB/H, cable).
In this period, we observe a relatively constant price development for tariffs realised via the copper technologies ADSL, VDSL and VDSL vectoring. By contrast, for products with download speeds of 250 Mbps or above average prices decline in the period under observation. In this category the largest price variances between the different providers can be observed, too.
The comparison of the prices for the various technologies within the same bandwidth classes shows a clear order: fibre-based tariffs are most expensive, followed by xDSL- and cable-based products. It should be noted, however, that direct competition between all three technologies is limited to few large cities (e. g. Cologne, Munich, Hamburg) yet. Cable networks and copper networks upgraded to vectoring and supervectoring show a large overlap. New fibre optic networks have been mainly deployed outside the cable footprint, however. For this reason we observe little direct infrastructure competition between these technologies apart from the aforementioned metropolitan areas. This also explains the partly striking price differences in the offers of companies with a focus on urban (potentially competitive) and rural areas.
It is noteworthy, that at the end of the period under review, competition is particularly strong in the bandwidth classes that can also be supplied with upgraded copper technology (vectoring and supervectoring). The wholesale-based competition also contributes significantly to this outcome.
Against the backdrop of the relatively limited coverage with fibre networks, supply and demand for very high bandwidths in Germany are still at an early stage of development. Accordingly, a further monitoring of the future developments is recommended.
The Discussion Paper as well as a research brief summarising the most important contents of the Discussion Paper are available for download (only in German language).
