Deutsche Telekom Plans $27 Billion Network Spending in Germany

Deutsche Telekom AG (DTE), Europe’s largest phone company, plans to increase spending on networks in its home market of Germany to ward off rivals including Vodafone Group Plc and Telefonica SA. The carrier earmarked 23.5 billion euros ($27 billion) in the next five years for its German landline and mobile networks, small cells and the digitalization of infrastructure, Chief Executive Officer Timotheus Hoettges said in Munich on Sunday. The company budgeted 23 billion euros for 2010 to 2015. The announcement gives a glimpse of Deutsche Telekom’s longer-term financial plan set to be unveiled at an investor meeting next month. The spending puts pressure on Vodafone, whose CEO Vittorio Colao said in November that he wants to reduce outlays when he completes a 19 billion-pound ($29 billion) global network upgrade program dubbed Project Spring next year. “We can’t start investing and then suddenly stop,” Hoettges said in an interview during the Digital Life Design conference. “Building networks is what we know how to do best - - we’ll leave making apps and creating services to others.”A network that gives users fast data transmission regardless of where they are will give Deutsche Telekom leverage when negotiating with content providers. Competition for customers may heat up if software makers such as Google Inc. and Facebook Inc. decide to expand into infrastructure in a few years’ time, for example by buying network operators, the CEO said. Photographer: Hannelore Foerster/Bloomberg Timotheus Hoettges, chief executive officer of Deutsche Telekom AG, said the carrier... Read More Higher spending by Deutsche Telekom bodes well for network-equipment makers, such as Ericsson AB (ERICB), Alcatel-Lucent SA, Nokia Oyj and Huawei Technologies Co. To contact the reporter on this story: Cornelius Rahn in Munich at crahn2@bloomberg.net

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