T-Online Focuses on Broadband with Scrapping of Flat-Rate Access

16 February 2001

German telecoms company Deutsche Telekom has abolished the flat-rate internet access offer of its ISP subsidiary T-Online for all except broadband subscribers.

The move represents a shift in strategy for T-Online, also in the final stages of negotiating a content partnership with media group Kirch Gruppe. The joint venture, to be unveiled in the coming months, aims to make broadband DSL connections the leading delivery option – not only for the internet but also for pay-TV – to the mutual benefit of both partners.

The telecoms company says it wants to attract 2.3 million customers to its DSL connection by the end of this year. However, the figure currently stands at only 300,000, plus an extra 500,000 who have ordered the technology.

The abandonment of the loss-making flat-rate analogue and ISDN service may see subscribers defect to rival ISPs like AOL Deutschland, think analysts. However, observers point out that this would matter little to Deutsche Telekom, which charges the same rates both to AOL and T-Online for network access. Indeed, line rental cost is what made the services unprofitable in the first place.

News source: Financial Times