The two companies will now be able to deploy fibre in the north-west of the country, providing they honour commitments they’ve made.
Background: Deutsche Telekom and utility company EWE have been planning a joint-venture since 2017. In December 2017 they signed a non-binding declaration of intent; this was followed by a contract in March 2019, when the two companies set out the purpose of the venture in more detail. The JV is called "Glasfaser NordWest" ("NorthWest Optical Fiber") and aims to connect 1.5m households with FTTH in the German states of Lower Saxony, North Rhine-Westphalia, and Bremen. Each of the two partners would receive a 50% stake in the venture, which would start its operations once the competition authority gave its approval.
The Bundeskartellamt accepts the commitments: On 30 December 2019, the competition authority gave its formal approval to the venture, which can go ahead since the authority believes it has a “beneficial effect on competitive conditions in the affected markets”. This is also due to the commitments the companies have taken up, as follows. The venture undertakes to connect 300k customers in the next four years, some of which in rural areas. This means that much more is being developed in the area than originally planned, and more than would be expected if the companies were to expand independently. Both companies continue to participate independently of one another in tenders for the promotion of gigabit-capable telecommunication networks, particularly in rural areas. The two companies refrain from “strategic countermeasures” against competitors that also want to expand fibre networks, and from focusing solely on urban areas which already have cable networks. Finally, third parties are granted non-discriminatory access to the new network and high-quality wholesale technical products. Within a certain period of time, a specific share of the connections will be reserved for competitors, which can then market to retail customers themselves.
Next steps: The venture will now become operative, and has no end date. The two companies plan to invest up to €2bn over a 10-year period. The first connections in the expansion area should be available during 2020.
