Competition in the fixed-line telephony markets has continued to intensify over the past two years. Significant progress has been made in the area of local calls. Following the introduction of call-by-call and preselection, Deutsche Telekom AG’s competitors have been able to gain substantial market share more quickly than was anticipated two years ago.

In the long-distance and international calls sectors, alternative providers have further improved their market position. In international calls in particular, competitors now account for a market share of more than 60 per cent in terms of turnover and more than two-thirds in terms of call minutes. At the end of November 2005, the Federal Network Agency determined that Deutsche Telekom AG no longer held significant market power in the international calls sector.