Pat,more from Ce BIT. Look who's in Germany now:British Telecom
which uses NN ATM switches , owns 45% of rapidly expanding Viag. Do you think that BT will recommend that Viag buy the same NN switches they have?
From WSJ Interact:
March 19, 1998
Viag, o.tel.o Seek Bigger Share
Of Germany's Telecom Market
By BRANDON MITCHENER
Staff Reporter of THE WALL STREET JOURNAL
HANNOVER, Germany -- Several of Deutsche Telekom AG's competitors in Germany unleashed a barrage of low prices, business partnerships and new products in a bid to increase their share of the newly liberalized German telecommunications market.
Two of the biggest and best-funded rivals, Viag Interkom GmbH and o.tel.o communications GmbH, said they were confident they will each capture a growing share of a rapidly expanding market despite getting off to a late start.
"The entire market has been underestimated," Martin Furuseth, managing director for business development of Viag Interkom, told a news conference ahead of the CeBIT information technology trade fair here. "We're now expecting twice as many customers as we had in our original business plan," he said, adding that the company could have as many as 300,000 customers this year.
Although several companies began competing with Telekom in local and long-distance services on Jan. 1, Viag Interkom and o.tel.o, are just now beginning to offer residential long-distance services and are leaving local service to Telekom. Both companies already offer long-distance and other services to business customers.
Increased Long-Distance Service
Viag Interkom announced the start of nationwide long-distance services for private customers beginning May 1 and digital mobile phone services in eight German cities accounting for 45% of the German population starting this summer. Viag Interkom would become the fourth German company to have a license for digital mobile phones. The company also unveiled a new calling card and said it will begin offering Internet access for residential customers this summer.
O.tel.o said it launched its national and international long-distance services for private customers three weeks earlier than its planned start date of April 1. "We've been connecting private customers to our network since March 11," o.tel.o Chief Executive Ulf Bohla told a separate news conference. "The echo is overwhelming."
Both Viag Interkom and o.tel.o said they would be expanding partnerships with other companies in Germany and elsewhere in Europe in an effort to catapult themselves into competition for a broader audience.
Growing Alliances
Viag Interkom announced a partnership with VAF Bundesverband Telekommunikation e.V, an association representing small and medium-size telecommunications sup pliers in Germany. O.tel.o, meanwhile, announced an expansion of an existing partnership with American Express Corp. American Express will now offer o.tel.o calling-card services to all of its customers in Germany, after offering the same service to corporate customers in December.
Peter Briese, chairman of Viag Interkom, predicted the company's sales would rise to 4.5 billion marks ($2.47 billion) in 2001 from more than 400 million marks this year. By the year 2006, the company hopes to capture an 8% share, or 10 billion marks in sales, of a market that is expected to total 120 billion marks.
Mr. Bohla of o.tel.o is aiming for annual sales between seven billion and nine billion marks by 2005.
While Deutsche Telekom has criticized some competitors for freeloading on its infrastructure in order to wage a cut-rate price war, Viag Interkom and o.tel.o disclosed significant investments in the coming years.
Investment Strategy
Mr. Briese said Viag Interkom intends to invest 7.5 billion marks in its own networks by the year 2006, while Mr. Bohla said o.tel.o plans to invest about seven billion marks by the year 2005. O.tel.o has installed 11,000 kilometers of fiber-optic cable connecting all cities in Germany to build its own integrated voice/data network.
Viag Interkom is 45% owned by German holding company Viag AG, 45% by British Telecommunications PLC and 10% by Telenor AS of Norway. O.tel.o is jointly owned by two of Germany's biggest utilities companies, Veba AG and RWE AG.
Separately, Deutsche Telekom's mobile communications unit, Deutsche Telekom MobilNet GmbH, unveiled a reorganization to help it catch up with market leader Mannesmann AG. Kai-Uwe Ricke, the new chairman of T-Mobil, said he plans to have the company focus on customer segments rather than product lines, much as Mannesmann has done with its Mannesmann Mobilfunk unit.
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