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Number of players on German telecoms market to increase 'massively' with fibre rollout – Sopra Steria

Number of players on German telecoms market to increase 'massively' with fibre rollout – Sopra Steria

The number of competitors on the German telecom market could increase “massively” under the country’s broadband rollout, as new players like local communities, regional suppliers and subsidiaries of municipalities begin to build their own infrastructure and offer parallel internet, telephony and TV services to end customers, according to a new market study by Sopra Steria Consulting. 

These new local suppliers, including players like Munich’s M-Net and BBV, are putting large telecoms providers “under distress” thanks to their proximity to households, expertise with end customers from their energy business and bundled services offered, said Sopra Steria. The end to the separation of network infrastructure and service providers would mean telecoms providers would lose their direct access to customers and “hegemony” in telecoms networks, said Sopra Steria consultant Karl-Heinz Kohne. 

Other challenges include the rise of coaxial networks as a “true alternative” to fibre, given its technical prowess and the fact that customers are concerned “solely” with broadband speeds and prices rather than the technology itself, said Kohne. Large providers should invest in more individualized offerings, improved services and alternative business models, as well as purchases of and cooperations with local providers, as a result, they added. 

While the brand names of large telecoms providers are still strong enough to compete effectively, regional providers are gradually growing awareness of their brand. Moreover, regional brand and currently “in vogue” with consumers, enabling them to gain new customers, and an Allensbach survey last year found that 35 million Germans preferred purchasing regional products. The municipality in Nuembrecht in North Rhine-Westphalia (NRW), where between 80 and 92 percent of households have a municipal connection, is proof of nationwide trend in this case, said Sopra Steria.

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