Bundesnetzagentur publishes decision on duct access rates
Klaus Müller, Bundesnetzagentur President: "Creating a fair balance of interests to the benefit of all consumers"
Year of issue 2024
Date of issue 2024.07.19
The Bundesnetzagentur has today made its decision on the prices for the use of Telekom's civil engineering assets.
"With today's decision we are creating a fair balance of interests that ensures incentives to invest in swift fibre rollout across the country to the benefit of all consumers. This may also be a positive signal for other companies investing in Germany,"
said Klaus Müller, President of the Bundesnetzagentur.
Rates lower than proposed
The Bundesnetzagentur assessed a large number of different rates that Telekom would charge competitors for using its civil engineering assets.
This was the first time a rates assessment had to take account of the effects on the dominant undertaking's business plan. This is to ensure that there is still an incentive for the undertaking to roll out high-speed networks. The rates calculated by Telekom had factored in its potential loss of customers to competitors and consequent loss of revenue (lost contribution margins). The Bundesnetzagentur basically kept this in mind and first calculated the costs incurred by Telekom and then determined a reduced surcharge for the effects on the business plan. The result is rates that are lower than proposed. Markups on costs are only justified for infrastructure for which Telekom is making particular fibre investments. This is the case with the connections between street cabinets and customers, where Telekom has only just begun to deploy fibre.
By contrast, the main cable segment is already mostly equipped with fibre that was installed by Telekom at the same time that it deployed vectoring. Investments in this segment are factored in by a risk premium on the rate of return for fibre networks (known as the "VHCN WACC").
In its comments on the draft decision, the European Commission criticised the fact that the rates approval was not based strictly on Telekom's costs. However, in the interest of encouraging the rollout of fibre networks German legislators opted for investment incentives that go beyond an orientation on costs.
It is not yet possible to say exactly how take-up of duct access will be. The approval is therefore initially limited to a short, two-year period. The Bundesnetzagentur will be closely monitoring market trends.
The decision has been published at www.bundesnetzagentur.de/bk3-23-079.