AOL sells German internet business

AOL has sold its German internet access business to Telecom Italia for €675m

AOL has sold its German internet access business to Telecom Italia for €675m (£456m) in a cash deal. 

The sale gives Telecom Italia two million broadband subscribers in Germany, making it the second largest provider for high speed internet services in the country after Deutsche Telekom. 

The deal is expected to take four to six months to pass through the market's regulators, and would give Telecom Italia around nine million broadband subscribers in Europe including its businesses in Italy, France and The Netherlands.

Germany has Europe's largest internet and broadband market with 11.44 million broadband users and a penetration rate reaching 13.87 per cent.

However, the slow rate of unbundling in the country means that Deutsche Telekom still has a big market lead.

"The incumbent operator does not have to face much competition from DSL and cable modems because the German cable TV networks are technically backward and are largely controlled by Deutsche Telekom itself," said a report by analyst firm Point Topic. 

Following a drop in its core internet access business, AOL is now focusing on the provision of advertising services.

"The scale of our advertising network in Germany, Europe's second-largest online market, will increase," said Jon Miller, chairman and chief executive at AOL LLC.

"This continues our strong momentum in building our worldwide advertising business and serving a large and highly engaged audience."

Time Warner is currently in talks to sell its French internet business to Neuf Cegetel.