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Germany urged to modernize cable network
Deutsche Bank report discusses future of broadband

Frankfurt (pte025/18.02.2003/13:10) - Germany's cable network is in serious need of overhaul, say Deutsche Bank group (DB) economists in their recent report "Germany's broadband networks - Innovation on hold".

DB analysts say the German cable network, which has a high density of user households, is mainly designed for the transport of image data for television and in many places lacks the necessary technology for bi-directional data exchange. This capacity is a precondition for an interactive connection between individual network users.

The fragmented infrastructure of the network and its many partners (over 5,000 providers) have slowed down needed investments in the German cable network up to now, say analysts. In the long term they expect only the "big players" to do profitable business over the technologically outdated network, due to the high investment costs. A first step would be to get rid of the separation between cable network levels three and four.

The existing telephone network, dominated by Deutsche Telekom, is to remain the main source of Internet access in the middle term, in spite of competition from technologies such as Powerline (Internet via electric sockets) and broadband television cable. The report attributes this to technical and economic constraints.

According to the Frankfurt researchers, Powerline has been less successful because initial technical glitches frightened off curious newcomers, but the Inhouse-Powerline option remains a feasible network alternative within companies.

Deutsche Telekom recently sold its remaining six TV cable companies on level three for 1.725 billion euros to a consortium consisting of Goldman Sachs Capital, Apaz Partners and Providence Equity.

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