DT Expands Its Vectoring Commitments

Dividend pressure
Even so, the SLU footprint seems relatively small. A more pressing concern for investors may be what these plans mean for dividend payments over the next few years. In fairness, Deutsche Telekom cannot be accused of springing them on the market without any warning. The presentation it issued at its 2012 capital markets day indicates that vectoring could be extended to 80% of households beyond 2016 as a "further option." But the financial implications of this move are not made explicit.

Investors can expect to hear more on that subject later this week, with Deutsche Telekom due to announce 2014 results and provide a strategy update. Yet executives have already expressed disappointment with the performance of the broadband-and-TV business, which was lagging growth targets as recently as September 2014, and Germany's cable operators are in combative spirits. When DOCSIS 3.1 technology becomes available later this year, they will be an even bigger threat. (See The Chips Fall for DOCSIS 3.1 .)

The rollout of Gigabit broadband access networks is spreading. Find out what's happening where in our dedicated Gigabit Cities content channel here on Light Reading.

Can super-vectoring swoop to Deutsche Telekom's rescue? Unlike vectoring, it is not an industry standard but a proprietary technology developed by China's Huawei Technologies Co. Ltd. , which claims it is capable of supporting 400 Mbit/s connections over a loop length of 300 meters. Like G.fast -- another copper-fortifying broadband technology -- it seems to work by extending the range of frequencies over which broadband signals travel. Rival vendor Alcatel-Lucent (NYSE: ALU) is promoting a similar technology called Vplus. Both, however, remain commercially unproven. (See G.fast: The Dawn of Gigabit Copper?)

Perhaps more could be gained from G.fast, which is now starting to influence the decision-making of some leading European operators. UK fixed-line incumbent BT reckons G.fast could be used to support 500 Mbit/s services for most of the country's population, and 1 Gbit/s for the hungriest broadband customers, over the next few years. Deutsche Telekom, though, has been circumspect when it comes to G.fast and has yet to even acknowledge the standard in official announcements. That it touts super-vectoring in preference to G.fast suggests it harbors serious doubts about the latter. (See BT Puts G.fast at Heart of Ultra-Fast Broadband Plans.)

Ultimately, none of these copper options will stand up to long-term scrutiny. Deutsche Telekom expected standard vectoring to help it compete more effectively against faster cable services, but cable operators have not been standing still. The arrival of ultra-high-definition TV and more advanced Internet applications will put fresh demands on Europe's broadband networks. Before long, Deutsche Telekom will be forced to take that FTTH plunge. (See The Perennial Need for Speed.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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iainmorris 2/24/2015 | 3:14:49 PM
Unambitious? Deutsche Telekom is certainly not the only European operator resisting FTTH but its broadband strategy does seem to lack a degree of ambition -- especially considering how far-sighted the operator looks when it comes to IP network investments and even technologies like SDN and NFV. 
VernonDozier 11/28/2015 | 5:28:53 AM
Hey Ma, that's a monopoly..! In the US, telecommunications companies have been forced to upgrade networks to both Fiber and HFC networks to create redundant networks which meet consumer demand and incentivize competition.  

The issue is, and has always been that twisted pair copper doesn't scale, and will always have a fixed bandwidth of 300-350Mhz.  Regulators are making a mistake in saying a "virtual" service is the same as a physical one.  Who owns the meter..? 

As a former Government-owned monopoly, and part of the Germany's post office, Deutsche telekom will always have built-in bureacracy. 

Deutsche Telekom is only going to do what the law says it SHOULD do, and not what it COULD do from a service perspective. 

For example, to maintain a wireless license in the US, the letter of the law states that wireless providers are only required to provide coverage to 70% of the licensed service area.  This FCC requirement leaves up to 30% of the area to be un-covered, but still covered on the map.  As another example, Deutsche Telekom's US division was found guilty in issues of labor.  The company required female employees to sign gag orders when they have become victims of sexual harassment.  Deutsche Telekom has ignore requests of its employees, along with 20 elected members of congress, and also the orders in the Court (NLRB) Ruling where Deutsche Telekom was found guilty of 11 counts.  (only appealed two).   What kind of service would you expect from a company that operates this way, and by extension of the Federal Government ownership, will never fail..?

Not only should this be questioned; but DT's attempt to acquire British Telecom is also now very suspect.  The technology is designed in a way that prevents choice, competition, and requires goverment to pick companies to become monopolies.
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