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Telecommunications networks are one of the key infrastructure facilities of a country.

Competition in the telecommunications sector

Since the liberalization of the telecommunications markets there has been a rapid increase in competition in this sector. Numerous companies have entered the market. Suppliers are upgrading their networks and investing in new technologies. Nowadays, apart from the telecommunications networks, many TV cable networks are also equipped for the internet and telephony. Mobile phone networks are also being expanded to allow for fast internet access.

Nevertheless, the telecommunications markets remain highly concentrated. Although there are many local and regional companies, the market is dominated by a few major suppliers. In addition, the markets are currently undergoing a consolidation phase. Numerous suppliers are merging and the markets are becoming increasingly saturated.

What's more, many telecommunications providers only have limited network infrastructure of their own and therefore depend on input provided by Deutsche Telekom. The provision of some of these input services is subject to regulation by the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway (Bundesnetzagentur).

What does the Bundeskartellamt control?

The Bundeskartellamt protects competitive structures on the telecommunications markets by exercising strict merger control. To prevent a further concentration of the market, mergers of large cable network operators have been prohibited or only cleared subject to strict obligations.

With its tool of abuse control the Bundeskartellamt can take action against dominant and powerful telecommunications companies. In recent years, the authority has conducted several proceedings to examine whether providers are using their pricing and rebate strategies to squeeze competitors out of the market.

Telecommunications providers cooperate increasingly in the expansion of their networks to enable broadband internet access. In assessing such cooperations the Bundeskartellamt examines whether inadmissible price agreements have been concluded and to what extent the cooperations limit effective infrastructure competition.

Furthermore, the Bundeskartellamt is involved in regulatory decisions taken by the Bundesnetzagentur which concern the telecommunications sector. The Bundesnetzagentur decides in agreement with the Bundeskartellamt whether a market is subject to regulatory measures under the German Telecommunications Act (TKG). The Bundeskartellamt also regularly exercises its right to comment on other regulatory decisions taken by the Bundesnetzagentur, e.g. on fees for network use.