# Speedtest® Market Report

### Germany

#### Published December 7, 2016

With an average Q2-Q3 2016 download speed comparable to that in Bulgaria and Moldova, Germany’s fixed broadband is slower than you might expect from Europe’s largest economy. At 40.38 Mbps, Germany ranks 29th in the world for average fixed broadband download speed and 72nd for average upload. Though the German ISPs have been slow to embrace fiber, companies like Deutsche Telekom (Telekom) and Unitymedia are investing in exciting new technologies to achieve fiber-like speeds on existing networks, which should make for an interesting speed comparison one year from now.

On the mobile side, an average download speed of 24.26 places Germany 34th in the world, just behind the United Kingdom and the Czech Republic. Conversely, Germany’s average mobile upload speed, while only coming in at 62nd in the world, is faster at 8.14 Mbps than the country’s average broadband upload speed. Huge improvements in German mobile speed are expected in the near future as Telekom, O2 and Vodafone expand into 4.5 and 5G technologies.

The German government’s digital agenda for 2014 to 2017, Industry 4.0, calls for rapid digitalization of German industry and society including closing gaps in infrastructure, driving innovation, and improving security. Germany’s Ministry for Economics and Energy developed the Industry 4.0 plan to promote dialogue between investors, manufacturers and the government. As a country known for its high quality engineered goods, with 25% of GDP coming from construction and industry, the German government is betting on the Internet of Things (IOT) as an economic driver. In Germany, the focus on internet security particularly affects small and medium businesses (SMEs) that need strong cyber security in order to encourage investment. The German government demonstrated continued commitment to digital initiatives by launching a follow-up plan titled “Digital Strategy 2025” as Industry 4.0 nears its end date. While these initiatives are largely aimed at industry, consumers also benefit from infrastructure and security improvements.

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### Germany Fixed Broadband Speeds

### Report Stats

#### TEST COUNT:

6,108,624

#### 1-YEAR CHANGE (DOWNLOAD):

24 %

#### 1-YEAR CHANGE (UPLOAD):

39 %

Average fixed broadband download speed in Germany increased by 24.5% to 40.38 Mbps in Q2-Q3 2016 from 32.41 Mbps in Q2-Q3 2015. That places Germany immediately ahead of the United Kingdom for average download speed. Although average upload speed saw a 39.5% increase during the same time period, the result was a dismal 8.12 Mbps. That ranks Germany 72nd in the world for average upload speed, between Jordan and Australia.

Telekom is the largest ISP in Germany with 12.8 million subscribers. It’s followed by Vodafone (5.7 million), O2 (5.1 million) and Tele Columbus (4.4 million). Given that Germany is the European Union’s most populous country, it’s not surprising that the country’s telecom market is large, ranking third among OECD countries for total fixed broadband subscriptions, but Germany only ranks ninth among OECD countries for fixed broadband penetration with 37.6 subscriptions per 100 residents. That’s lower than Switzerland, France, South Korea and most of the Nordic countries, but higher than the United States and Canada.

Despite being relatively widespread, Germany’s high speed internet network is lagging technologically with the country primarily relying on DSL and some cable for broadband subscriptions. As of December 2015, only 1.5% of broadband subscriptions (approximately 448,000) were delivered over fiber, up 30% from the year before. For comparison, 23.6% of Denmark’s network is fiber while France’s fiber network comes in at 5.3%.

In Germany’s largest cities, fixed broadband and mobile speeds along with the costs of subscribing to both are very competitive on a global scale. This is true even as the market consolidates with the third largest ISP, Tele Columbus, pursuing a growth strategy of acquiring regional providers. In August 2015, Tele Columbus acquired Primacom for $767.22 million (€711 million) and in December 2015, it acquired Pepcom for $542.5 million (€505 million). In other strategic shifts, Telekom is considering leaving the UK telecom market after the Brexit vote which would involve selling its 12% stake in the BT Group.

Rural broadband coverage in Germany has historically not been as strong as that in urban areas. In 2014, 82% of urban areas in the German state of Bavaria had broadband coverage while only 16% of rural areas did. But the German government has focused on improving rural coverage using a combination of private investment and government subsidies. The efforts appear to be working, by 2015, rural coverage in Bavaria had increased to 24%.

The German government has promised download speed of at least 50 Mbps to all Germans by 2018, including those in rural areas. As of 2015, about 70% of Germans already had access to internet meeting that criteria with urban areas having better access overall. To aid in this effort, the German government is pursuing regulatory and cost-cutting measures for rural areas. In October 2015, the government promised $2.9 billion (€2.7 billion) to encourage companies to develop rural areas and any area with speeds below 16 Mbps. In July 2016, the Transport and Digital Infrastructure Ministry announced they would provide another $1.4 billion (€1.3 billion).

German ISPs have invested less in fiber than might be expected, likely due to the massive cost and development time. Instead, they have largely focused on VDSL vectoring technology. VDSL works by cancelling out noise or interference on existing copper networks to provide higher bandwidth. Most of Telekom’s network currently consists of large copper cables. In July 2016, Telekom won approval to update its 330,000 junction boxes with vectoring technology to make their internet speeds about four times faster. The upgrade would allow 5.9 million households speeds of up to 100 Mbps. Complaints were voiced by competitors such as Vodafone due to concern over dependence on Telekom’s networks, however, the EU has ruled that Telekom must facilitate rivals’ access to its networks.

### Germany Fastest ISPs

### Download

#### FASTEST: Unitymedia

Unitymedia, subsidiary of Liberty Global, is the fastest broadband provider in Germany for Q2-Q3 2016 downloads with a speed of 141.80 Mbps. The ISP is the second largest cable provider in the country. Unitymedia currently offers speeds of 10 Mbps, 60 Mbps, 120 Mbps, and 400 Mbps with prices ranging from $21.51 (€19,99) to $69.94 (€64.99). Unitymedia is investing in a new cable standard, DOCSIS 3.1, which provides speeds of up to 10 Gbps. Field tests were announced in June 2016. It expects to launch in some regions as early as 2018.

### Upload

#### FASTEST: Telekom

Telekom is the top provider for Q2-Q3 uploads at a speed of 18.71 Mbps. Telekom offers speeds from 16 Mbps, 50 Mbps, 100 Mbps and 200 Mbps with prices from $37.61 (€34.95) to $53.76 (€49.95). Telekom uses a combination of VDSL and FTTH to provide speeds of up to 100 Mbps and 200 Mbps, respectively. In November, hackers attacked nearly 1 million home internet routers used by Telekom customers.

Speedtest data for top 10% download performance shows Unitymedia with the fastest fixed broadband at 141.80 Mbps in Q2-Q3 2016. That’s a 14.6% increase from Q2-Q3 2015. Unitymedia has a 41% lead over its closest competitor, Vodafone. Average upload speeds during Q2-Q3 2016 were considerably slower. Telekom offered the fastest uploads at 18.71 Mbps, 85.6% faster than the same period during year before and 56.8% faster than rival Vodafone.

While Unitymedia provides the fastest download speed for Germany as a whole, several companies provide faster speeds to specific cities. Berlin’s fastest ISP was Tele Columbus which currently offers speeds up to 400 Mbps. The company will provide private households in Markt Indersdorf, which is located northwest of Munich, with access of speeds up to 1 Gbps by the end of this year on a fiber-optic network owned by the municipality. Other regional providers leading speeds in major cities are Wilhelm.tel in Hamburg, Cablesurf in Munich and Primacom in Leipzig.

The appetite for high-speed connections in Germany is strong. According to Unitymedia, three out of four new customers opted for packages with 120 Mbps or more. As a result of this high demand for speed, Unitymedia recently upgraded its entire cable network, which is available to more than 10 million homes, to DOCSIS 3.1 in order to offer high-speed internet with speeds up to 400 Mbps. CEO Lutz Schüler says the company is working on accelerating the network to gigabit speeds for 2017.

#### HOW SPEEDTEST MEASURES FIXED BROADBAND

ISPs offering fixed broadband services are ranked based on top speed performance, which is determined using the 90th percentile of the download and upload speeds, or Top 10%, of each ISP’s Speedtest results. While many ISPs offer various service tiers, our aim is to determine who is fastest by showing the performance achieved by each residential ISP’s top tier. These speeds represent customers who subscribe to faster service tiers and provide an accurate view of the top-end performance of a given ISP. It is important to note that customers subscribing to higher tiers will generally pay more for their service than the average subscriber. For purposes of this report, only Top Providers in a given location were included in the analysis. Each ISP that accounts for at least 3% of the total sample size in the geographic area are included as a Top Provider. When analyzing Germany, we use the average speed, as it represents the experience of a typical consumer in those countries. When comparing ISPs individually, we use top speed performance, as it represents the performance a consumer could reasonably expect to receive if they subscribe to one of the ISP’s higher tiers of service.

### Germany Mobile Speeds

### Report Stats

#### TEST COUNT:

1,616,862

#### 1-YEAR CHANGE (DOWNLOAD):

19 %

#### 1-YEAR CHANGE (UPLOAD):

44 %

Germany’s average download speed on modern mobile devices increased 19.7% year-over-year to 24.26 Mbps in Q2-Q3 2016. That ranks Germany 34th in the world, just ahead of Serbia and Italy, for average mobile download speed. Though average mobile upload speed increased 44.5% year-over-year, the country’s average upload speed of 8.14 Mbps in Q2-Q3 2016 leaves a lot of room for improvement. Germany ranks 62nd in the world for mobile upload speed, just behind Panama, Ireland and the United States.

German mobile providers offer fairly equal speeds across all major cities. Berlin, the capital, has an average download speed of 50.65 Mbps. Only four major cities have faster download speeds: Cologne, Düsseldorf, Dortmund and Leipzig. Of these four, the difference is not more than 5 Mbps.

There’s still a lot of room for expansion in the German mobile market. In Q4 2015, German mobile penetration was at 66.80%. That sounds like a solid number, but places like Japan, Sweden and the United States are at well over 100% penetration with 138.8, 120.8, and 116.7 mobile subscriptions per 100 inhabitants, respectively, and ranks Germany 24th for mobile penetration among OECD countries.

When O2’s parent company, Telefonica, purchased E-Plus in 2014, it took the first step toward integration of its GSM and UTMS networks. As of January 2016, customers could enjoy national roaming between the two networks and the infrastructure reached about 90% of the population. As a result of the acquisition, three major providers now dominate the German mobile market. O2 has overtaken incumbent Telekom, and as of Q3 2016 has the highest market share in the mobile market with 39.5%, while Telekom holds 32.6% and Vodafone has 27.8%. In third place is Vodafone with 26.2% of the mobile market.

The European Commission (EC) has been putting pressure on the German regulator, Bundesnetzagentur, to amend its current calculations for fixed termination rates. These costs, charged by one carrier to another to deliver calls between networks, are passed on to customers as part of the overall cost of a call and the German proposal would place them 200% higher than the majority of member states.

Last year, Bundesnetzagentur auctioned off new spectrum bands 700 MHz and 1500 MHz, along with a re-auction of 900 MHz and 1800 MHz bands, which were set to expire. Overall bids were low, the only three bidders paid a mere fraction per MHz per unit of population compared to US benchmarks. Together O2, Telekom and Vodafone are paying a combined $5.5 billion (€5.1 billion). The 700 MHz band will become available for mobile in 2017 to help achieve the EU and German government’s broadband objectives including mobile broadband coverage for at least 97% of households in each federal state and at least 98% of households nationwide, including rural areas. By mandate, high-speed railways and national motorways will also have mobile coverage.

### Germany Fastest Mobile

### Download

#### FASTEST: Telekom

Telekom is the top provider for downloads in Q2-Q3 2016. Telekom offers mobile speeds of 1 Mbps, 3 Mbps, 6 Mbps and 10 Mbps. Prices range from $29 (€26.95) to $72.59 (€67.45). In November, Telekom and Huawei demonstrated the world’s first autonomous end to end slicing of a 5G network in a lab environment.

### Upload

#### FASTEST: Telekom

Telekom is also the top provider for uploads in Q2-Q3 2016. The company has substantial holdings in other telecom companies around the globe, including a majority stake in T-Mobile US that it has twice attempted to sell in the past five years.

Mobile speeds for modern devices in Germany are increasing steadily. The fastest mobile carrier for both downloads and uploads was Telekom with average Q2-Q3 2016 speeds of 36.14 Mbps and 11.80 Mbps, respectively. Telekom’s speeds also represent a 25.8% improvement for download speed and a 51.4% increase in upload speed over the previous year. Telekom was 69% faster than runner-up Vodafone for average download speed and 63.2% faster than Vodafone’s average upload speed.

Telekom is undoubtedly the German leader in mobile speeds nationwide. In Q2-Q3 2016, the mobile carrier provided speeds of over 100 Mbps to more than 10 cities. Telekom offers Wi-Fi calling over Voice-over-LTE (VoLTE) and in June 2016 rolled out Wi-Fi using WLAN call at no extra charge. This allows customers to make and receive calls over Wi-Fi where they previously may have been unable to due to bad reception. In September 2016, Telekom worked with Huawei to successfully complete a trial using LTE-Advanced Pro (also known as 4.5G). A speed of 1.22 Gbps was reached in a live trial.

Telefonica also worked in cooperation with Huawei to launch a pilot 4.5G network as part of the TechCity Munich project. In July 2016, the first live trial of 4.5G was conducted, and speeds up to 400 Mbps in live operations were achieved in and around the Olympic Park in northern Munich.

Vodafone is also advancing towards faster speed via carrier aggregation, combining 800 MHz, 1800 MHz and 2600 MHz bands. In Berlin and Dusseldorf, Vodafone upgraded its LTE networks, which now provide speeds up to 500 Mbps. In the coming months, the company will be expanding this technology to more cities across the country. In September 2016, Vodafone joined Telekom in the VoLTE revolution by also launching Wi-Fi calling for all customers.

The German government has plans for nationwide 5G by 2020, with gigabit coverage by 2025. In November 2016, partners from 5-G Crosshaul, an EU initiative, successfully completed a 5G-crosshaul test in Berlin that reached speeds of over 1.2 Gbps with a latency of less than one millisecond. The real world trial was undertaken by Core Network Dynamics, InterDigital and Fraunhaofer HH Institute. The test will help advance Germany towards a 5G network.

#### HOW SPEEDTEST MEASURES MOBILE CARRIERS

The top mobile carriers in Germany are ranked using the average download speed of “Modern Devices” - those devices that are capable of connecting to the fastest, broadly-available wireless networks. In Germany, this means devices capable of 4G LTE. This ensures we provide an accurate view of the typical performance a user can achieve using a modern smartphone or tablet on a given mobile network. Top carriers are those that each account for at least 3% of the sample size in the geographic area. When analyzing the country as a whole, we use the mean value of all cellular results to account for the typical user. However, when analyzing individual carriers, we look at “Modern Devices” to account for top speeds available in Germany.

## City Leaders

## Market Summary

While Germany has a large and relatively mature telecom market, speeds are slower than might be expected. Although ISPs provide adequate speeds, customers are willing to pay for faster speeds than are currently available to them. It’s not clear when those faster speeds will be delivered. As other countries step up their game with extensive fiber investments, Germany is taking slower steps, focusing on prolonging the use of its copper networks with vectoring technology. As a result, the percentage of German fiber subscriptions remains very low, especially in comparison with other countries.

Mobile faces a similar crossroads. Though Germany is advancing in mobile technology with VoLTE, WLAN and 4.5G projects, speeds and market penetration lag behind comparable countries around the globe. The German government has taken positive steps in setting speed goals and focusing on internet security, but the country still has work to do to catch up to its European neighbors both in terms of infrastructure and internet speeds. Next year is the year to watch to see how new technologies and additional spectrum bands improve the consumer’s mobile experience.

This report was written with contributions from Sera Tajima.

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