Deutsche Telekom Commits to FTTC & Vectoring
– To Invest €6 billion ($7.8 billion) to Upgrade Wireline
Deutsche Telekom (DT) plans to spend about €30 billion ($39
billion) over the next three years in order to ensure
Germany’s “future of telecommunications,” both wireline and
wireless. Like AT&T in the States but unlike BT in the UK
because it does not have a mobile operation, the money will be
invested in both wireline and wireline networks. The total
spend covers other countries such as the US where DT owns the
fourth place T-Mobile USA wireless company.
DT said it will spend €6 billion ($7.8 billion) of that on
what it called “superfast” broadband by using FTTC (fiber-to-
the-cabinet or neighborhood) and VDSL2 vectoring. It said the
FTTC network will be available to 65% of Germans within three
years, which means it has been testing vectoring thoroughly
and has planned out its deployment in detail.
DT, like telcos in other European countries, is involved with
the telecom regulator in getting approval to kick third-party
broadband services off of its copper wires. It needs to do
that, it said, to deploy new vectoring technology that it said
would increase VDSL data transmission rates to up to 100 Mbps.
It’s the same sort of tussle that we reported on with Belgacom
and the Belgium regulator. Belgacom succeeded and so will
deploy VDSL2 vectoring throughout most of its copper wire
DT said, “In the future, innovative hybrid-box technology will
feed traffic in both directions via vectoring and LTE. This
will make download speeds of up to 200 Mbps possible and
upload speeds of up to 90 Mbps.”
VDSL2 vectoring delays telcos’ need to build all-fiber
networks by using noise cancellation to increase broadband
speeds on existing copper networks. However, vectoring does
require that the telco deploy fiber closer to the residence
where it can connect to the existing copper telephone wires.
DT said it will accelerate the building of a Germany-wide LTE
network that will cover 85% of the population by 2016. It said
the LTE network will allow speeds up to 150 Mbps. DT also
pledged to spend $4 billion building an LTE network in the
United States for its T-Mobile USA operation where it competes
against AT&T Mobility, Verizon Wireless and Sprint.
DT chairman René Obermann provided some urgency to the
undertaking by saying it has become necessary for the company
to upgrade its core infrastructure. He said, “Hesitation now
means playing catch-up later. We are investing in the future –
with resolve and a clear strategy.”
That urgency doubtlessly applies to the German regulatory
agency Bundesnetzagentur to get out of its way.
Obermann said, “The investment plans we have presented today
will lay the foundation for future growth. And it is the
people in Germany in particular who will benefit more than
ever from the modern infrastructure.”
The Regulatory Battle
European regulatory agencies such as Germany’s
Bundesnetzagentur require incumbent telcos to lease out to
Local Loop Unbundlers (LLUs) the copper that runs from the
cabinet to home — and a rates the regulators set. The LLUs can
connect to the cabinet, which may be in the neighborhood or in
a telco central office, which compete against the telco in
selling broadband consumers.
The problem is that third party gear such as the LLUs can
interfere with vectoring, which means that any speed increases
could be lost. Telcos such as DT want the regulator to suspend
that mandate so they can fully deploy vectoring. That is the
only way, the telcos say, that they can control every piece of
equipment that’s connected to the network and so ensure the
highest speeds that vectoring is can provide.
In short, the telcos promise the fastest speeds but want the
LLUs off of the network entirely. Regulators are caught in the
middle. They, politicians and the government want the fastest
speeds but are concerned by a return to when telcos were a
monopoly. It’s unclear that a way can be found to deploy full
vectoring speeds without giving back to the telcos their
By the way, cablecos are not forced to lease out their lines.
The Comparison to Britain
BT has a plan called Openreach in which it plans to spend €6
billion ($7.8 billion) on FTTC with VDSL2 vectoring over the
final pair of copper wires to the home. Openreach is intended
to cover two-thirds of the UK and DT’s plan is about the same
at 65%. One benefit of vectoring is that it forces telcos to
run fiber closer to the residence so a cherry on top of the
Openreach plan is that about 5% to 10% of UK homes will have
an all-fiber network. After 2013 residences on the FTTC
network will be able to order an all-fiber connection.