German Phone Rates Continue to Drop

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BONN - Last month Deutsche Telekom announced that the year-long, dramatic slide in phone prices had hit bottom, but two days later E-Plus, a mobile phone company, cut prices across the board to 12.5 cents a minute.

While prices are still packaged and bundled and vary from service to service, lower costs are one key to greater Internet usage in Europe's most lucrative market.

The fact that a mobile phone company is still lowering prices is also significant because Germany is moving rapidly towards hand-held WAP and other portable devices as Internet access tools.

By the end of this year E-Plus expects Germany to have more mobile phones in use than terrestrial wire phones. Another mobile company, debitel, is looking for 40 million mobile phone subscribers by yearend.

But debitel also argues that the mobile phone boom in Germany will end by 2001. "After that," said debitel president Joachim Dreyer, "growth will only be possible by taking customers away from other mobile providers."

Equally important for Germany's Internet future is DT CEO Ron Sommer's demand that the government stop regulating the domestic telephone industry.

Sommer argued that in the developing telco markets national boundaries no longer have a role to play and national regulation of the industry "are to a large degree counter-productive."

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