German utilities are planning to launch Internet access through power lines.
Powerline technology involves converting data signals into frequencies capable of being transferred over power cables. Having finally overcome the technical difficulties, utilities in Germany are keen to employ it to compete in the telecoms market, offering customers high-speed Internet access.
RWE and Swiss group Ascom have announced they will offer customers constant high-speed web connections via their power cables from July 1. The service will be cheaper than other telephone and cable TV companies, with customers charged according to the amount of data they receive. For example, $22.36 would enable a customer to download 250MB of data up to 30 times faster than an ISDN connection, according to RWE.
RWE PowerNet hopes to obtain 20,000 customers by the end of 2001. At the same time, EnBW is planning to connect 7,500 customers in Ellwangen over the summer, and MVV plans to link up 3,000 customers in Mannheim.
However, these all depend upon new laws being passed in July to allow powerline to be used in Germany. Worse, pan-European regulations will need to be passed for the technology really to take off; according to analysts, this is a low way off. This uncertainty was a key factor in Siemens’ recent decision to halt work on developing this technology.
Another threat to the penetration of powerline is Deutsche Telekom’s development of broadband services. The firm is spending almost $1 billion this financial year rolling out the service to the German market. ADSL, which allows fast access to the Internet via fixed telephone lines, is expected to grow rapidly. DT has already sold 850,000 lines, connecting 400,000 customers. More lines are expected following a deal with French firm Alcatel to deliver several hundred thousand ADSL lines.
Until the regulatory hurdles are overcome, it is doubtful whether the market will attract large investment, despite the revenue-generating opportunities. While the service may well be viable for the mass market in the medium to long term, until then the telecoms giants will dominate the sector.
