Deutsche Telekom to sell new IPTV-friendly wholesale offering to Vodafone

Vodafone Deutschland has signed a preliminary contract with Deutsche Telekom that will enable it to deliver services including IPTV over Telekom’s fibre network.

Vodafone will share the investment risk of Telekom’s fibre rollout. The incumbent telco is committed to spending about €6 billion on its fixed network over the next few years, using vectoring to deliver speeds of up 100Mbps to 24 million homes.

Under the deal, Vodafone will obtain lines from Deutsche Telekom at reduced prices in return for agreeing to purchase a certain volume. Vodafone will purchase a mix of VDSL and new vectoring lines.

Vodafone will also acquire ‘layer 2’ bitstream lines that will enable it to to gain control of the connection closer to the end customer and deliver its own added value services. This wholesale product is designed to give third-party providers the ability to deliver IPTV services to customers.

Vodafone will acquire traditional ‘layer 3’ bitstream lines ahead of the new wholesale product becoming available. “We are delighted to have another partner on board in the shape of Vodafone to share the investment risk,” said Niek Jan van Damme, head of Deutsche Telekom’s Germany business. “This gives us greater certainty of achieving the necessary number of customers for the new network and lets us push ahead with the roll-out.”

The cooperation between the pair is scheduled to kick off before the end of this year. The agreement is subject to approval by the Federal Network Agency and the Federal Cartel Office.