07-02-2018 Hubertus Kischkewitz

• Extensive digitalization project approved for Stuttgart and five districts
• New mobile base stations will achieve 98 percent LTE coverage
• Upgrade to 5G network will make the Region a pioneer
• Broadband service company will coordinate the expansion, underscoring the pioneering role of the Region

Deutsche Telekom will build and operate the network of the future for the Stuttgart Region, laying the foundation for digitalization of the area. The company is investing a total of up to 1.1 billion euros. The Region is providing a funding program valued at up to 500 million euros to the commercial rollout.

Deutsche Telekom and the Stuttgart Region will advance the fiber-optic rollout together, as strong partners, in the state capital of Stuttgart and the five surrounding districts Böblingen, Esslingen, Göppingen, Ludwigsburg, and Rems-Murr, for all 179 cities and municipalities. These plans have been cemented in a letter of intent that representatives of the Region and the company signed in Stuttgart today (July 2, 2018).

The final contract will be signed by the end of the year. The first building work to connect business parks and municipalities to the fiber-optic network will kick off immediately afterwards: both partners share the goal of supplying 90 percent of company sites in business parks with fiber to the home (FTTH) by 2022. By 2025, half of all households, all business parks, and all eligible schools will be connected with FTTH. Ultimately, 90 of the total 1.38 million households will benefit from gigabit lines by 2030. What's more, all of the nearly 140,000 company sites and businesses are to be covered by 2030.

DT submitted the best binding bid by far

Dr. Walter Rogg, Managing Director of the Stuttgart Region Economic Development Corporation (WRS), commented on the agreement: "The letter of intent signed today represents a milestone in the ongoing digitalization of our high-tech region. It will help us meet the structural and technical prerequisites for the digital applications of the future – for businesses and residents alike. Our companies will be able to shape the necessary transformation processes successfully. Of all the competitors, Deutsche Telekom submitted the best binding bid by far. They can make use of existing fiber-optic networks to a large extent, which will accelerate the rollout and cut costs. This excellent result has come thanks to the economic strength of the entire Region and the committed, competent work by Hans-Jürgen Bahde, the regional broadband commissioner. The close, trusting relationship among the different levels within the Region has paid off once again."

The region will become flagship of digitization

Dr. Dirk Wössner, member of the Management Board at Deutsche Telekom responsible for business in Germany, said: "We are pleased that the Stuttgart Region has chosen to partner with Deutsche Telekom in building the high-speed network of the future. Together with the five surrounding districts, Stuttgart has one of the strongest, most innovative regional economies in Europe. A fast data network is the basic infrastructure for digitalization. We will put our shoulders to the wheel to make the Region a flagship and prove that their trust in us is not misplaced. We will shape the future of the Region together – and I'm looking forward to it." Wössner also emphasized: "We are a reliable partner when it comes to connecting nearly one-and-a-half million households and businesses to the fiber-optic network in the next few years. Deutsche Telekom is planning, building, and operating the networks of tomorrow, together with partners in some cases. Our partnership with the Stuttgart Region will be a shining example of how this can work. We'll get started as soon as the contract is signed. We want to connect as many people, schools, and businesses as possible to the fiber-optic network as quickly as possible. The project has a long-term scope, but its short-term successes will be tangible to many. Month for month and year for year. We will be relying on the support of the 179 cities and municipalities in the Region when it comes to rapid execution on site. And we will open our fiber-optic network to third parties at fair market conditions. To accomplish this, we also need a legal framework that rewards investment and provides legal certainty: Regulation must not stand in the way of this innovative partnership model, the first of its kind in Germany."

Digitalization minister Thomas Strobl commented on the project launch: "The Stuttgart Region, with the state capital and five districts, is launching one of Germany's largest digital infrastructure projects here today, together with Deutsche Telekom. Together, they are setting course for the digital future of nearly three million people and more than 200 business parks with some 14,000 companies. Fast Internet is the lifeline for digitalization. Fast Internet everywhere is of vital importance to a territorial, high-tech state like Baden-Württemberg. Increasing demand for connected digital services is also boosting demand for powerful broadband lines. Today is a great day for the Stuttgart Region and our digital future."

Mayor Fritz Kuhn emphasized the importance of the network expansion for the City of Stuttgart: "The state capital of Stuttgart is one of the most innovative high-tech and creative cities in Germany. That's why it's important for us to establish the fundamentals for the digital requirements of tomorrow, today – for developments like smart city, mobility 4.0, and 5G technology. Large companies need large Internet bandwidths – as do creative businesses, SMEs, and our schoolchildren. And these requirements will only increase in the future, making it crucial to invest in a future-oriented, high-speed fiber-optic network. I'm very pleased that we have succeeded in launching this digitalization campaign together with the districts, the Region, and the private sector."

Roland Bernhard, commissioner of the Böblingen district, said, "The digital transformation is making rapid advances and is one of the key challenges faced by the Böblingen, Esslingen, Göppingen, Ludwigsburg and Rems-Murr districts in the coming years. Powerful fiber-optic lines to every home and every business are the foundation for all digital applications and will be a decisive location factor for the attractiveness of regions, districts, and municipalities in future. The partnership with Deutsche Telekom will strengthen us in our competition with other regions and ensure that we will continue to be able to offer optimal living and working conditions to our residents and local companies in future.

As a result of the regional consolidation and cooperation with the private sector, the districts now have a binding expansion schedule for fast, fiber-optic-based Internet for the first time. "There are only winners in this project: Residents and companies will gain access to high-speed networks while the competitiveness of the Stuttgart Region is getting a long-term boost," commented Hans-Jürgen Bahde, the regional broadband commissioner. "Our partnership-based approach will ensure that private and public expansion activities are coordinated, prevent redundant network structures, and provide for more efficiency and investment security. To achieve our ambitious build-out targets, our organizational units at the regional levels and in the districts will provide the necessary operational framework."

DT will invest up to 1.1 billion euros

Deutsche Telekom will invest up to 1.1 billion euros in the fixed-network area. To achieve its targets, the Region will provide 500 million euros to the competitive rollout. Regional partners can also contribute their project shares through a variety of in-kind activities. In other words, Deutsche Telekom and other competitors can purchase or lease existing infrastructure in the municipalities. This can include existing optical fiber or even empty pipes. Funding from the state or federal governments may also be tapped in competitive tenders.

Deutsche Telekom also plans massive investments in improving mobile communications. LTE coverage in the region will be expanded to include 98 percent of the population. To achieve this, Deutsche Telekom plans to build new mobile base stations. In addition, the region will be one of the first in Germany to get a 5G network. This next-generation communications standard is an enabler for smart applications in logistics, retail, and manufacturing. 5G is the foundation for the Internet of Things, which both partners intend to use to tackle topics like traffic management and air pollution control.

There are also plans to found a broadband company for the region. Pursued together with the districts and the state capital of Stuttgart, a major part of the project will involve developing and implementing exemplary smart city use cases.

Deutsche Telekom is also reinforcing its ties to the Region with its constant presence: the company will coordinate the ambitious network expansion from a project office in the Region and will support regional businesses in capturing the opportunities presented by the technological transformation. As such, Deutsche Telekom has launched initiatives that let companies share information in the framework of a regional community, to learn from startups and digital visionaries, for example.

With its previous build-out activities in the Region, Deutsche Telekom has created an excellent starting point for further network expansion. The company had already planned to install more than 11,000 kilometers of optical fiber. Deutsche Telekom already operates the largest fiber-optic network in Germany, with 450,000 kilometers. The company laid around 40,000 kilometers of optical fiber in 2017; an additional 60,000 will be added this year, according to plans.