12/20/2001

German DSL market on the move: QSC signs line sharing agreement

Cologne, 20 December '01 - Cologne-based QSC AG, Germany's professional DSL provider, has concluded the first line sharing agreement with Deutsche Telekom AG - an important step towards a more open, competitive environment in the German DSL market. On March 30 of this year, Germany's regulatory authority for telecommunications committed Deutsche Telekom to offer line sharing to its competitors. However, Deutsche Telekom has significantly delayed furnishing a proposal detailing the terms of such agreements as well as the implementation process.

Thanks to the new agreement, QSC no longer needs to order so-called subscriber lines for each new customer from Deutsche Telekom but can share existing lines with the incumbent. QSC customers can thus access QSC's high-speed Internet service via their existing phone lines. Experience in other countries, which have had line sharing for a number of years, has shown that it simplifies new customer connections and reduces costs. The regulatory authority has yet to approve the price QSC has to pay Deutsche Telekom for the new service. Full commercial operation of the new system is therefore not expected until the coming year.

"While this is an important step towards a competitive DSL market in Germany, we need further rulings from the regulator," says QSC AG's CEO, Bernd Schlobohm. "If we are going to have a truly open market environment for high-speed Internet access, the authority needs to focus particularly on setting appropriate rates for line sharing as well as enforcing contractual penalties if required."

At around 97 per cent, Deutsche Telekom commands the lion's share of Germany's booming DSL market. The introduction of line sharing will promote competition and result in greater diversity with respect to alternative DSL services, especially in the residential customer segment.

Background

QSC AG (QSC) is a professional DSL provider in Germany. This technology makes efficient use of the 'last mile' on the basis of unbundled network access, thus multiplying data traffic speeds by a factor of several times compared with standard subscriber connections. QSC offers its business and residential customers broadband 'always-on' connections to the Internet, with up and downstream data transfer rates beginning at 144 Kbps and going up to 2.3 Mbps. The company's broadband network covers the 40 largest cities in Germany and reaches more than 20 million potential users.

Since April 2000, QSC has been listed on the Neuer Markt [QSC] segment of the Frankfurt stock exchange and the New York Nasdaq [QSCG]. The company's IPO increased its equity capital by more than EUR 280 million to over EUR 420 million.

For more information please contact:

QSC AG
Uta Teigel
Corporate Communications
Phone: +49 (0)-221-6698-281
Fax: +49 (0)-221-6698-289
E-mail: press@qsc.de