2. Discussion (here you can incorporate the answers to the questions)
1. Describe the market for telephony services prior to the enactment of the 1996 Telecommunication Act in Germany. Why is it unlikely that DT would face new competition in the market for retail fixed-line telecommunication services prior to 1996?
2. In what forms could local-level wholesale access to DT’s fixed-telephone network take? Describe the price structure for wholesale access to this network. Describe how wholesale DT’s wholesale prices were regulated.
3. Describe the connection technologies available to retail consumers. What were DT’s price structures for these connection technologies? How were retail prices in the market for telephony services regulated?
4. Explain the concept of a “margin squeeze.” Outline DT’s argument for why its pricing practices do not constitute a margin squeeze. Outline the counter argument.
4. What is the current status of the firm(s).
About Deutsche Telekom
Deutsche Telekom is one of the world’s leading integrated telecommunications companies with more than 131 million mobile customers, 33 million fixed-network lines and over 17 million broadband lines (as of September 30, 2012). The Group provides products and services for the fixed network, mobile communications, the Internet and IPTV for consumers, and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in around 50 countries and has over 230,000 employees worldwide. The Group generated revenues of EUR 58.7 billion in the 2011 financial year - more than half of it outside Germany (as of December 31, 2011). (Fuad)