Discussion Papers

Matthias-Wolfgang Stoetzer

Netzmanagementdienste und Corporate Networks in Deutschland: Marktstruktur und Marktentwicklung
Nr. 109 / Mai 1993

Summary

Since the postal reform of 1989 a number of private suppliers are providing services like transmission, configuration and management of telecommunication networks, which formerly used to be the core services of the DBP Telekom´s monopoly. At the beginning of 1993 more than a dozen of pivate enterprises offer such Network Management Services in Germany. The market volume of these private suppliers in 1991 amounts to about 300 mill. DM. The DBP Telekom with a market share of about 80% of the total market volume of 1.5 bill. DM remains the dominant player. In some sectors of the market Telekom is already facing rather strong competition. The forecasts of the private firms as to the market development are optimistic - with average annual growth rates of 20% up to 1994 - but do not reach the growth rates of other market studies.

Taking into account the active suppliers of Network Management Services and the potential competition it is possible to conclude that a workable competition prevails. The market development in general certainly is a success of the deregulation act of 1989. Due to the asymmetric relations between the different suppliers - the DBP Telekom is the monopolistic provider of the network infrastructure and at the same time competes with private enterprises in the field of Network Management Services - it will be an important task for the regulatory authority, the German Ministry of Post and Telecommunications, to prevent unfair competitive behaviour.

The market for Network Managment Services in Germany is still in a phase of development involving elements of experimentation and expansion. Experimentation describes the actual market behaviour as to new technologies of transmission (Frame Relay, ATM). At the same time the market is expanding and competition is a process of market entry and exit. The main characteristics in this situation are very rapid changes of market structure, market conduct and market performance.

In the short run this is mainly true with regard to the supply side. New enterprises, alliances and cooperations on the one hand and market exit on the other hand both on the national and international level are frequent phenomenons. In the medium term suppliers of Network Management Services will only stay in the market, when they are able to provide services in all the relevant industrial centres of Germany and also on the international scene. In the long run technological innovations will have an important influence on the market structure. Due to economies of scale of these technologies the market concentration in the field of Network Management Services will probably increase.

Only German language version available.

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