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German Network Charges Dominated By Deutsche Telekom

Federal telecom regulators in Bonn, Germany, have set the rate that Deutsche Telekom can charge its competitors for local network connections to consumers.

The rate will be DEM 25.40 per month (US$14.70). It will be valid through March 21, 2001. This rate determines the amount of competition possible in local telecom networks.

While there is a competition on long distance calling rates, Deutsche Telekom's 46 million connections make it by far the biggest network for local calls. The rental price for local network connections was provisionally set at DEM 20.65 (US$12). Deutsche Telekom had asked the regulators to set it at DEM 37.30 (US$21.60).

Mannesmann Arcor, another major German telco, said that the new prices would benefit ISDN clients but exclude 90 per cent of private households.

"The figure now decided on will protect the monopoly position of Deutsche Telekom in local networks," said Harald Stoeber, Arcor's board chairman. "The consumer will be paying the bill."

o.tel.o chief Thomas Geitner also regretted the regulators decision.

"The losers in this decision are the consumers. This price means that the competitive advantage of Deutsche Telekom will remain in the local networks," he said.

Even more serious than the monthly rental, however, are one-off rates varying from DEM 191.64 (US$111) to DEM 337.17 (US$195) for changing or establishing new connections for subscribers. Deutsche Telekom also charges the competition DEM 107.70 (US$62.3) for each cancellation.

The German Association for Post and Telecommunications, (Deutsche Verband fuer Post und Telekommunikation) said that it now expected Deutsche Telekom to drastically reduce its basic rates for analog telephone connections.

According to the provisions of the telecommunications law, Deutsche Telekom is not permitted to charge its competitors higher prices than those charged to its own clients.

The association stated that this means it should charge its own clients a basic rate of DEM 28 (US$16.2) for analog connections.

A Telekom spokesman said that the organization was not prepared to enter into speculation about these charges. The association stated that it would be making a complaint about the decision to the European Commission, as it was impossible for competition to flourish with a fixed price for approximately 80 percent of domestic calls.



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