(MENAFN- Gulf Times) The billionaire founder of United Internet has urged Internet providers to found a joint company to build out Germany's high-speed broadband network, challenging market leader Deutsche Telekom to back the venture.
Ralph Dommermuth said industry should take the lead on laying the glass fibre network in Germany, where just 2.5% of households are directly hooked up to such ultra-fast connections — less than in other developed nations.
Responding, Deutsche Telekom said Dommermuth's proposals had come months after it and half a dozen other companies had already proposed teaming up to build out Germany's glass-fibre network.
The new government formed by Chancellor Angela Merkel has pledged to back broadband investments to the tune of €10-12bn over the course of this parliament as part of an effort to create a ‘Gigabit society' by 2025.
That amount, Dommermuth said in an interview with newspaper Welt am Sonntag, would only cover a fraction of the overall cost of providing nationwide glass-fibre coverage that he estimated at €80bn.
German business groups have already cautioned that under-investment in connectivity threatens to sap its export competitiveness as manufacturing processes become increasingly automated.
'Each telecommunications company that wants to participate in this alliance would contribute capital according to its market share, said Dommermuth, a self-made businessman whose fortune is estimated by Forbes magazine at $6.4bn.
If companies paid in €10bn and a further €10bn came in the form of state subsidies, it would be possible to borrow a further €10bn, Dommermuth said, creating an overall investment pot of €30bn.
United Internet would be willing to chip in €1.4bn in line with its 14% market share, he said, adding Deutsche Telekom's participation would be 'critical.
Responding, Deutsche Telekom said it had proposed such an alliance last September — together with glass fibre players wilhelm.tel, Deutsche Glasfaser, M-Net, Stadtwerke Neumuenster, Net Cologne and Ewetel.
'United Internet should stop all this talk and finally pick up a shovel, Telekom said in a statement. Its invitation to United Internet's 1 & 1 remained open.
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