Monday, 18 October 2021

Glasfaser Nordwest's future may be in jeopardy after court ruling

by Harry Baldock, Total Telecom
Tuesday 28 September 21

The joint venture between Deutsche Telekom and EWE has seen its approval overturned by a court after rivals Vodafone and Deutsche Glasfaser complained about its impact on competition

Back in 2017, Deutsche Telekom and utility company EWE announced they were forming a joint venture, Glasfaser Nordwest, to deploy fibre across (unsurprisingly) the north-west of Germany.   At the time, the company’s local competitors argued against Nordwest’s creation, saying that the negative impact to competition would be substantial…

Back in 2017, Deutsche Telekom and utility company EWE announced they were forming a joint venture, Glasfaser Nordwest, to deploy fibre across (unsurprisingly) the north-west of Germany.
 
At the time, the company’s local competitors argued against Nordwest’s creation, saying that the negative impact to competition would be substantial. Nonetheless, the Federal Cartel Office approved the joint venture in late 2019, with Nordwest beginning commercial operations in early 2020.
 
Combined, Deutsche Telekom and EWE said they would invest €2 billion into Nordwest over the next decade, aiming to serve 1.5 million households and business premises. 
 
However, Vodafone Germany and Deutsche Glasfaser continued to decry the unit’s creation, ultimately taking legal action that saw the case brought before the Higher Regional Court in Dusseldorf. 
 
In the case, the complainants argue that the competition obligations imposed on Nordwest by the regulator are not robust enough, resulting in restrictions to competition and ultimately “slowing down the expansion of fibre optics in the north-west instead of accelerating it”.
 
As part of the conditions on which its creation was approved, Glasfaser Nordwest must provide access to its network on a non-discriminatory basis, but was also given some concessions by regulator, such as not being subject to the same level of tariffs as the existing wholesale players. 
 
Last week, the Higher Regional Court agreed with Vodafone and Deutsche Telekom’s complaints, saying that the regulators reasons for approving the joint venture were “unsustainable”. With the approval revoked, the joint venture has now been dubbed ‘illegal’.
 
Naturally, Glasfaser Nordwest will appeal this decision, first with the Federal Cartel Office and then, if unsuccessful, with the Higher Regional Court itself. According to media, the company is confident of a positive outcome, though admits that “tighter conditions” could be enforced by the regulator. 
A spokesperson also noted that the company would continue to rollout fibre despite the ruling.
 
 
How has the creation of Glasfaser Nordwest reshaped the local broadband market? Find out from the experts themselves at our live Connected Germany conference 
 
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