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Deutsche Telekom to spend €30bn on fibre and LTE

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Germany’s Deutsche Telekom has confirmed plans to invest a whopping €30bn between now and 2015, with €6bn destined for broadband rollout in Germany using fibre-to-the-cabinet (FTTC), vectoring and LTE technologies, and €4bn to be used for building an LTE network in the United States.

Pointing to the continued increased in demand for broadband services on both fixed and mobile networks, CEO René Obermann said that hesitation will now mean “playing catch-up later”, adding: “We are investing in the future – with resolve and a clear strategy. It is the people in Germany in particular who will benefit more than ever from the modern infrastructure.”

And benefit they will – under these plans, 85 per cent of the country’s population will be covered by 2016 with data transmission rates of up to 150Mbps thanks to the LTE rollout, while the fibre rollout is expected to cover 65 per cent of the population within the same timeframe, delivering speeds of up to 100Mbps.

Deployment of vectoring technology is expected to increase VDSL data transmission rates to up to 100Mbps (provided a corresponding regulatory framework is in place), and in future, innovative hybrid-box technology is expected to feed network traffic in both directions via vectoring and LTE, making download speeds of up to 200Mbps possible and upload speeds of up to 90Mbps.

In the US, capital expenditure of around $4.7bn has been planned for 2013 and around $3bn in each of the two subsequent years (compared with $2.7bn per year on average from 2010 to 2012). The focus in the US is on building out an LTE network, which is expected to cost around $4bn on its own.

“These investment plans will ensure Deutsche Telekom remains absolutely sound and reliable over the long term,” said Timotheus Höttges, CFO of Deutsche Telekom.

“We are going against the flow with our high investments in these times of economic challenges – because we have worked hard to establish sound balance sheet ratios and now have the necessary leeway. Our dividend planning offers our investors both an attractive return and planning reliability.”

By the end of 2014, the company aims to have stabilised revenue in Germany compared to 2013, with bundled products, cloud solutions and its IPTV service ‘Entertain’ expected to drive revenues in the growth areas of mobile Internet and connected home in particular.

With these investments, Deutsche Telekom aims to dominate its domestic market in terms of both mobile service revenues and the number of broadband lines, with market shares of 35 per cent and 43 per cent respectively by the end of 2015.

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