Germany needs 20 billion euros for broadband upgrade: document

Ethernet cables used for internet connections are pictured in a Berlin office, August 20, 2014. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - Germany needs to invest some 20 billion euros ($23 billion) by 2025 on a national broadband upgrade, four parties seeking to form a coalition government said on Friday in a document seen by Reuters.

The four parties, which include Chancellor Angela Merkel’s Christian Democrats (CDU) and their Bavarian sister party, wrote in a joint paper they would make upgrading to broadband a priority.

Germany lags behind other industrialized countries on digitization, and politicians are facing calls to ramp up investment to avert a loss of industrial competitiveness.

The smaller parties in talks to form a new government, the pro-business Free Democrats (FDP) and environmentalist Greens, have called for the government to sell its stake in Deutsche Telekom to help fund the upgrade.

But there was no mention of assets sales in the position paper presented at the end of another week of coalition talks following Merkel’s narrow election victory in late September.

The FDP want to sell the government’s entire 31.9 percent holding in Deutsche Telekom. The Greens propose parking the 14.5 percent of Telekom that is directly controlled by the government at a state development bank, raising 10 billion euros.

Merkel’s conservatives, meanwhile, want to allocate 3 billion euros a year from the budget to build a 5G network that complements the fiber-optic push. They say the public finances are strong enough, without resorting to asset sales. ($1 = 0.8586 euros)

Reporting by Markus Wacket and Andreas Rinke; Writing by Joseph Nasr; Editing by Douglas Busvine