Telekom emergence will affect travel

By | November 28th, 1996

Deutsche Telekom AG’s long awaited privatization, which culminated in a stunning Wall Street debut last week, is bound to rattle the interactive travel industry.

What’s a stock offering got to do with interactive travel? Lots.

The German telecommunications company raised at least $11.6 billion from the sale of 600 million shares – and also set aside another 23 million shares for employees-to shed part of its debt and become more competitive.

Not a moment too soon: the company is about $66 billion in the red. Where did all the money go? Well, it’s sitting on a pristine, 70,000 mile, all-fiber network that will connect to every house, every office building, and every school in Germany by next year. Telekom is also the largest cable company in the world, with about 16.2 million subscribers.

“We have an excellent infrastructure,” one executive told me. “We just haven’t put it to good use.”

No more. Telekom, now liberated from government ownership, plans to strip away many of the prohibitively expensive tariffs that Internet users currently pay. That may include eliminating a flat fee of $5 per month to be “registered” as an official Internet user, a 3 cent per minute surcharge added to the already outrageous local calling rates, and charges for its commercial online service, T-Online.

Telekom is serious about scrapping its antiquated and monopolistic ways. The company’s technology is solid 21st Century; its business practices, until now, haven’t been. So let’s see. Five-plus million German Internet users, free at last to surf. On fiber. Do you see where I’m going?

Related story:   Lessons learned from biztravel.com

I spent an afternoon at Deutsche Telekom just after the euphoria of the IPO was starting to wear off, asking managers how they felt about the Internet’s opportunities. They predict that lower rates will lure even more Germans on line next year.

“The Internet market is about to explode,” predicted one manager. “And we’re ready for it. Bandwidth is not a problem.”

An enviable position for any telecommunications company to be in. If it’s true-if the number of European, specifically German, users is set to skyrocket-then prepare to watch the number of “.de” hits on your Web site go through the roof. Get ready to field more booking requests in German.

Most of the growth is expected to come from the newly integrated eastern states. Eastern Germany’s totally new phone system is not only among the most modern on the continent, it also connects users to the Net who only five years ago had no phone at all. These newbies are curious about the U.S. but speak little English, because schools taught Russian as a second language until the fall of the Berlin Wall.

If you believe the Web is truly worldwide, then this might be a good time to begin building site interfaces in languages other than English. Translate your pages into German, Spanish, Italian, French, and Portuguese.

German, it seems, is a good place to start.



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