In terms of revenue, Germany’s ICT market is the second largest in the European Union with 19 percent of the EU market and fifth in the world, with 5 percent of the global market. The ICT industry achieved sales of around EUR 130 billion in 2009. Telecommunications products and services makes up the largest segment, with estimated sales of EUR 66.07 billion in 2009. (Source: GTAI)
Contrary to optimistic predictions, sales in the telecommunications sector declined slightly, mainly due to increased competition. In 2009, total sales were EUR 62 billion. Deutsche Telekom AG’s (DTAG) share has decreased since 2000, from of 39.7% to 36.6%. However, the former monopoly continues to be the dominant telecommunication service provider maintaining 51.6% of the fixed-line and 30.4% of the cell phone market.
Since the 1990s, prices for telecommunication services have decreased dramatically. Since 2002, Germany has seen a decrease of almost 13 percent in cellular communication costs, while prices for fixed-line communications were relatively stable.
Investments in the telecommunications sector grew marginally, by EUR 0.1 billion in 2008 compared with 2007 (figures for 2009 are not yet available). Deutsche Telekom AG invested EUR 3.3 billion and its competitors EUR 3.9 billion in infrastructure and solutions in 2008. The volume of investments in Germany is expected to increase slightly in 2009 and 2010.
By the end of 2008, mobile phone companies in Germany recorded more than 107 million subscriptions and market penetration had reached 130.8%. Since then cell phone usage has steadied and even declined slightly to 130.7%.
The mobile phone market in Germany, as in most developed nations, is clearly heading towards PDAs (Personal Digital Assistants) or as they are called in Germany, smart phones. Predictions for this year say that every third cell phone produced worldwide will be a smart phone. By the end of 2010, there will be an increase of 47 percent or 8.2 million in the number of these phones. Compared to 2009, cell phone sales in general have risen four percent to a total of 28 million units.
Transmission speed and worldwide access to networks are invaluable assets to corporate customers. A recent study found that 60% of all corporate clients using cellular data transmission technology believe that quick and easy transmission leaves them more time for their clients and customers. Accordingly, revenues stemming from the data sector of mobile communications continue to grow.
Traditionally, providers of mobile technology and services have focused on larger companies as customers, because of their high demand for fast transmission and large data volumes. Increasingly, providers are offering more moderately priced plans in connection with simple mobile email solutions, attempting to offer attractive solutions for small businesses. T-Mobile, Germany’s largest mobile telecommunications services provider, has opened more than 100 branches offering solutions specifically for small and medium business customers.
In 2009, 39,000 UMTS network stations and 120,000 UMTS radio stations were operating in Germany. This infrastructure enables almost 70% of Germany to access the internet through the UMTS network. About 26 million UMTS-ready phones are registered with the German service providers. 19 million users regularly use UMTS to access the internet or send e-mails. The data volume increased threefold from 2007 to 2008 and again from 2008 to 2009.
High Speed Downlink Packet Access (HSDPA) accelerates cellular data transmission to speeds up to 14.4 Mbit/s and is completely integrated into the UMTS framework. Germany’s leading cellular carriers, T-Mobile and Vodafone, followed by O2 and E-plus, introduced HDSPA in the form of laptop network cards, allowing customers to access the Internet or their office’s networks from the road with the same ease as they would from their own home. Now videoconferencing via cellular phones is an option offered by mobile carriers.
The first attempt to bring Mobile TV to the market, in 2006, failed due to high costs and slow data transfer speeds. Mobile TV is available for the reception of programs broadcast by some of Germany’s public TV stations and is becoming more popular. The companies Mobiles Fernsehen in Deutschland and Neva Media GmbH joined in January 2008 to create Mobile 3.0, which has already received streaming licenses in Bremen, Sachsen, Thueringen, Hessen, Hamburg, Schleswig-Holstein, Berlin, Brandenburg, Baden-Wuerttemberg and Rheinland-Pfalz.
As the traditional cellular phone suppliers push into classic WLAN territory with cellular laptop cards which can reach broadband speeds, WLAN providers are countering by providing viable alternatives for traditional telephony. The majority of cell phones are WLAN-ready, and VoIP technology makes phone conversations using a company’s own WLAN or WLAN hotspots a convenient, high speed, and generally less expensive alternative to the services provided by cellular networks. Germany has the third most WLAN connections of any country, behind the United States and the UK. Of the ten countries with the highest level of WLAN connectivity, Germany’s growth rate is second only to that of Australia.
VoIP (Voice over IP)
Voice over IP is a service that allows voice transmission over the internet. It has been common in corporate networks for some time, but only gained substantial importance in the private market in 2008. Seven million users were using VoIP services in 2009; however, only four million had exclusive VoIP contracts. The remainder had access both to conventional ISDN telephones and VoIP.
Mobile Service Providers
German cellular phone service providers have long surpassed landline service providers. The diverse range of individualized contract options, including several flat rates, is the main driver for this development. Companies offering landline services include Deutsche Telekom, Arcor, 1&1, Alice, Versatel, Vodafone. Despite slightly decreasing overall revenues, mobile phone usage in Germany has risen incrementally. In 2008, Germany counted 107 million cell phone contracts compared to only 39.1 million landline contracts. Nine percent of all households had mobile phones and no fixed-line connection. 2008 saw a decrease of 2.5 percent of hours talking via the fixed-line network to 33 hours a person and 164 billion minutes total. Out of the 39.1 million fixed-line contracts, 3.7 million were for internet-based communications, 1.5 million for cable-TV, and 2.2 million for DSL. Currently, there are 110 million cell phone contracts and, statistically, a person spends around 37 hours per year on his or her cell phone. In total, 169 billion minutes were spent talking through cell phones in 2009, which is a 13 percent increase from the previous year. (Source: BITKOM)
The regulatory agency for telecommunications, Bundesnetzagentur, was established to ensure implementation of the Telecommunications Act and the liberalization of the communications market. This agency has the authority to grant licenses, assign and supervise frequencies, impose universal service obligations, control network access and interconnection and approve or review tariffs. In radio communications, it manages the radio frequency spectrum and detects radio interferences.
The German implementation of the EU telecommunication directive, the Telecommunications Act (Telekommunikationsgesetz -TKG), calls for the promotion of competition and provides for asymmetric deregulation of the market. Under this law, competitors have the right to petition if they feel a rate or practice abuses market dominance. Investigations of abuse may be initiated at the discretion of the Bundesnetzagentur, even without the issuance of a formal complaint. Recently, the Bundesnetzagentur has been criticized by the EU Commission for making decisions without previously consulting other European agencies. This criticism shows the extent of Germany’s connection to the EU and its need to adhere by EU telecommunication standards and regulations.
Germany has the single largest Information and Communications Technology (ICT)
market in western Europe, and the third largest in the world. Germany's
ICT market - including telecommunications equipment and services, computer
hardware, packaged software, and IT services - is valued at EUR 136.1 billion in
2002, representing approximately 24 percent of the total western European ICT
market. Telecommunications services account for the largest part of the ICT
market with approximately 40 percent of total sales, followed by IT services (22
percent), computer hardware (15 percent), and software (11 percent). Packaged
software will grow the most rapidly and overtake the hardware segment as the
second largest IT market segment in the country. IT services comprised the
largest IT market segment in Germany, valued at EUR 29 billion. Computer
hardware, including local-area- and wide-area-networking (LAN and WAN)
equipment, was valued at EUR 20.5 billion. Outsourcing and e-government are
among the few areas driving demand in IT services. The packaged software market
was valued at EUR 14.9 billion. there has been a shift from emphasis on
customized to packaged applications, as firms seek to benefit from the
experience of software developers and to cut costs. Major software and services
growth areas are customer relationship management (CRM), supply chain management
(SCM), IT security, and e-commerce (mainly in technologies that can speed up
sales processes and/or generate rapid cost savings, such as logistics, sales
tracking, and e-procurement). Germany's PC and Internet penetration rates are
higher than those of the United Kingdom and France,
German systems integrators, value-added resellers, and value-added
distributors work generally only with the top three products in each IT market
segment and, if they are going to resell U.S. solutions, want to see references
from the U.S. market. Despite the more cautious attitudes, quality is still a
very important consideration and German firms prefer to buy "the best".
German companies with more than 100 employees are believed to have
collectively spent around EUR 7.3 billion on IT security, approximately EUR 410
per employee. Experts estimate that, during 2003, roughly 10 percent of IT
budgets will be spent on IT security.
Major vertical end-users of IT in Germany include the banking,
telecommunications, insurance, and automotive industries. There are more than
5,000 IT firms in Germany, the majority of which are medium and small. Despite
the large number of companies, with the exception of hardware producer Siemens,
software producer SAP, and systems integrator T-Systems (a division of Deutsche
Telekom AG), German firms do not play a dominant role as suppliers to the German
IT market. U.S. firms are particularly competitive in software, supplying an
estimated 60 percent of the German software market
Germany has the largest mobile market in western Europe, accounting for 18
percent of the 310 million mobile subscribers in the region Early in 2001, the
number of wireless subscribers in Germany exceeded the number of wireline
subscribers for the first time. By the end of 2001, there were 56 million
wireless subscribers, compared to 52 million wireline subscribers. Germany's
mobile penetration rate of 68 percent is slightly higher than the EU average At
Germany has one of the top Internet penetration rates in Europe, Germany is
estimated to be one to two years behind the United States in Internet adoption.
Online banking is extremely widespread in Germany. In fact, Germans are the
heaviest European users of banking and financial websites, and Germany is much
further ahead in the use of online banking than the United States. An estimated
12 million Germans (15 percent of the population) banked online in 2001.
Deutsche Bank recently reported that research firms predict this number will
grow to between 22 million and 30 million in 2006. -August, 2003
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July 2003 est.
After work in Munich...@ Oktoberfest
& hitting the streets near Stuttgart