23 Sep. Alarming signal from Munich: Market dominance and strategic overreach must not be rewarded – Time for politicians and the Nederal Network Agency to take a stand
Cologne, 23.09.2025. Yesterday, Deutsche Telekom, M-net and Münchner Stadtwerke presented their collaboration on the use of the fibre optic network in Munich. According to the VATM, this model poses a significant threat to the success of competitors‘ fibre optic expansion projects.
“Telekom is sending an alarming signal in Munich: Grant us access to the passive infrastructure or face being overbuilt”, explains VATM Managing Director Dr Frederic Ufer. An agreement was only reached after Telekom announced that it was going to start overbuilding M-net’s entire Munich network. Telekom also refused to lease M-net’s well-developed fibre infrastructure, a subsidiary of Munich’s municipal utilities, on a bitstream basis. “The fact that Stadtwerke München, as the parent company of M-net, has given in to this pressure shows just how helpless even Europe’s largest municipal utility is in the face of Telekom’s market power,” says Ufer. “In Munich, we are currently witnessing the implementation of a market-dominant company’s strategy to force its competitors out of the market.”
As a result of Telekom’s aggressive strategy, the danger that competitors in the fibre optic market would be squeezed out and that a monopoly would be created by a company with a big market power in the fixed-line sector is a real one. The VATM has therefore been urging the Federal Network Agency and politicians for a long time to take regulatory action to address Telekom’s anti-competitive behaviour. The regulatory authority’s failure to restrict Telekom’s strategic superstructure is now coming back to haunt it. “It won’t stop at Munich. Telekom sees its anti-competitive strategy as legitimised by the BNetzA,” said Ufer.
“In two recent studies, VATM has drawn attention to alarming developments in the fibre optic market and growing risks to market diversity,” the managing director emphasises. “These findings should serve as a wake-up call, especially for the Federal Network Agency in its role as the competition authority.”
The study on network usage models in the fibre optic market, conducted by SBR-net Consulting at the beginning of September, shows that Telekom is focusing on exclusive lease models rather than partnerships that allow open network access. By doing this, Telekom is taking over entire fibre optic networks from regional infrastructure builders on a long-term basis. However, it is not providing competitors with passive access to its own network. This enables Telekom to control construction, operation and marketing. “This is exactly what we are seeing in Munich,” explains Ufer. “Although Stadtwerke München has its own fibre-optic network, which Telekom could use via its subsidiary M-net as part of open access, Telekom is demanding direct access to the network directly via the parent company. It is difficult to understand why Stadtwerke would destroy its own subsidiary’s business case in this way, effectively bleeding the company dry, which highlights the leverage that Telekom has”.
Across Germany, Telekom consistently refuses to make use of the numerous open access offers based on bitstream technology from its competitors. Instead, it demands access to unconnected fibre optics from them. However, at the same time, it does not grant its competitors access to its fibre optic network at this low level of value creation, but only at the active bitstream level, which puts them at a clear competitive disadvantage.
The study on competition in the fixed-line market, presented by DIALOG CONSULT and VATM just a few days ago, also confirms Telekom’s dominance. In a functioning competitive market, four major nationwide providers should each achieve a market share of around 25% on Telekom’s network. However, Telekom is expected to dominate with a share of over 95% by the end of 2024. Even with optimistic forecasts, competitors would only reach a maximum of 25% by 2030.
Now in its third consecutive year, the study clearly shows that alternative providers continue to lose significant market share when competing with Telekom.
“The competitors are performing strongly in the market. They are masters of technology, marketing, product innovation and customer service,” emphasises Ufer. “However, the fact that they are losing market share and revenue shows that competition in the fixed-line and fibre-optic market is at risk without effective regulation.”
“During this critical phase of the transition from copper to fibre, the market needs clear regulatory guidance and firm action to contain market power by the Federal Network Agency,” the managing director said. “This is the only way to ensure lasting, non-discriminatory and effective access to the network of Germany’s largest provider, Deutsche Telekom, and to preserve market diversity in the interest of citizens”.
