Trends in German telco market in 2015

16. April 2015

KEYMILE sees five trends defining the German telecommunications market this year. In terms of voice, further gaps in Voice-over-IP technology will be plugged. Vectoring and the next generation of the technology are gathering momentum. In this respect, the virtualisation of access networks is increasingly becoming important and optical fibre expansion is continuing apace. After all, video-on-demand will continue to drive demand for more bandwidth.

Even though broadband expansion has made huge strides on the German telecommunications market over the past few years, there are still plenty of challenges in the medium term. KEYMILE has identified five areas which will have a big impact on developments on the domestic telecommunications market.

1. In the voice network, Voice-over-IP (VoIP) is forcing out traditional telephony

Up to ten years ago, ISDN was the most popular type of telephone line. Network operators are now in the process of putting an end to the last remaining VoIP white spots. Migration has long since taken place in the transport network, or in transatlantic lines, in other words where a lot of calls are transmitted simultaneously. Today, even people with an analogue or ISDN line will still be making calls from the voice gateway or the exchange and via an IP network. Many businesses and homes are already using VoIP, with others about to migrate. In the next two to three years, the entire network in Germany is to be converted to VoIP. Then the last link in the communications chain will migrate to IP/Ethernet and a standardised, future-proof platform for voice, data and video services will emerge.

2. Network operators are using vectoring for faster broadband

VDSL2 and vectoring together are a bridging technology that is currently playing a pivotal role in providing better broadband coverage. Key reasons why many network operators are picking VDSL2 and vectoring are the comparatively low investment costs, strong demand for even more bandwidth and the opportunity to continue using existing copper lines. Another factor is that vectoring ensures greater network stability. The rollout of VDSL2 and vectoring has just kicked off. As regards ongoing developments, other technologies like G.Fast are ready and waiting. And development doesn’t stop there. The VDSL2 profile 35b is currently undergoing the ITU-T standardisation process, which on even higher frequencies is to increase the bandwidths to medium-length copper lines of around 300 metres to up to 250 Mbps. Even higher rates are to be expected due to the approach currently being debated. It remains to be seen to what extent network operators will use these advanced technologies, or perhaps prefer to lay optical fibre in the building instead.

3. Virtualisation of access networks

Due to the introduction of vectoring, the previous way the market has been organised is being pushed aside. The reason is that vectoring doesn’t require any unbundling of single subscriber lines at the outdoor cabinet. Instead of the previous, physical unbundling of lines, software-defined access networks enable virtual unbundling. Similarly to the software-defined networking and network-function-virtualisation architectures launched in data centres and by cloud providers, access networks can benefit from separating the control and data layer. Through virtual access several providers can then supply their customers with fast broadband access via a vectoring platform.

4. Optical fibre expansion continuing, particularly by regional network operators.

Similarly to vectoring, optical fibre expansion is gradually rising, driven primarily by regional and local network operators. In contrast to international companies quoted on the stock exchange, regional network operators have a longer period of time in which their investments in optical fibre expansion have to have paid for themselves. While the big companies wait for subsidies from politicians and the EU, an increasing number of local authorities and utilities have recognised the opportunities presented. Therefore, in the short term optical fibre expansion will continue to remain a domain of municipal utilities and their subsidiaries which after all know the local environment and can suggest flexible solutions.

5. Video-on-demand is gaining popularity.

More bandwidth is the basis for new services like video-on-demand. Millions of Germans are already retrieving content from the Internet through their TV sets. Via video portals, media libraries and OTT services (OTT = over-the-top) audiences are becoming their own programme directors. Consequently, network operators are faced with vast challenges. They have to adapt and expand their networks to cope with rapidly rising demand because video-on-demand is based on unicast connections where each receiver communicates directly with the transmitter.

“Due to VoD, broadband demand will climb steeply over the next few years, especially in the core networks because audiences’ viewing habits are changing apart from anything else. They can choose to retrieve content whenever and with whatever device they want”, explains Klaus Pollak, Head of Consulting & Projects at KEYMILE. “Continuing to expand vectoring is an important step on the route to optical fibre expansion to homes”.



KEYMILE is a leading supplier of telecommunications solutions with key facilities in Germany and Switzerland. The flexible and robust multi-service access and transmission systems allow network operators to provide a wide range of voice and data services on copper wire and optical fibre. Simultaneous availability of IP/Ethernet and TDM technology guarantees perfect evolution to packet-based data transmission. KEYMILE systems are used for reliable data transmission in mission-critical areas of telecommunications networks used by railway companies, energy suppliers and public organisations. Public network operators employ the products to provide top bandwidth to subscribers. The KEYMILE systems stand apart for their high level of availability and durability, ease of operation, good eco-footprint and top levels of system integration due to production facilities based in Germany. The company has subsidiaries and partners worldwide and has installed systems in more than 100 countries.


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