In a major blow to Deutsche Telekom, the German Postal and Telecommunications Ministry has set the maximum interconnection rate that the dominant carrier will be able to charge competitors. The government ministry also rejected previous interconnection agreements made between Telekom and WorldCom Inc and another with Tele Danmark. Deutsche Telekom had requested that the interconnection rate is set at 4.5 pfennig per minute but the Ministry has set the rate well below that 2.7 pfennig per minute. Telekom said it had yet to decide whether it could contest the rates but maintains that the settlement fee has been set well below the company’s operating costs. The price is uneven and unfair, said a Telekom spokesperson, we are looking into the effects of the decision, but it is too soon to say whether there will have to be cost cutting or increased charges to offset the ruling. The company said it might appeal against the Ministry’s ruling. The ministry says the two agreements it rejected must be re-submitted for approval following the setting of the interconnection benchmark. The rejection comes as Telekom looks to step up its interconnection agreements. Colt Telecom GmbH, from Frankfurt, says it is close to concluding an interconnect agreement with Telekom regarding a number of technical procedures and feasibility tests. Colt says it expects an interconnection order to be issued by the Ministry within 10 weeks. Yesterday the company announced a technical agreement with Thyssen Telecom AG, its fourth interconnection deal following those signed with Isis Multimedia Net GmbH, Worldcom Inc and Tele Danmark AG. It has also outlined technical details for sharing its network with Viag Interkom, the telecommunications joint venture between Viag AG, British Telecom Plc and Norway’s Telenor.
