United Internet is one of Europe’s leading internet specialists, with 25.65 million fee-based customer contracts (2019: 24.74 million; 2018: 23.85 million) and 39.40 million ad-financed free accounts (2019: 37.59 million; 2018: 37.00 million).
The Group’s operating business is broken down into the Access Division, which comprises the Consumer Access and Business Access Segments, and the Applications Division, which consists of the Consumer Applications and Business Applications Segments.
The Consumer Access Segment pools our fixed-network broadband products and mobile internet products (including associated applications such as home networking, online storage, telephony, and IPTV) for consumers.
Customers are offered these internet access products on the basis of fixed monthly subscriptions (plus variable, usage-driven top-up fees) with contractually agreed terms.
United Internet is one of Germany’s leading providers of broadband products (and particularly VDSL/vectoring and fiber-optic connections) via its 1&1 brand.
The Company uses its own fiber-optic network (1&1 Versatel) and covers the last mile in the case of VDSL/vectoring associations (“FTTC” = “fiber to the curb”) primarily via Deutsche Telekom’s BNGs/Layer 2 infrastructure (or Layer 3 outside its own fiber-optic network). In the case of direct fiber-optic connections (“FTTH” = “fiber to the home”), the last mile is bridged using city carriers offering FTTH connections and (with effect from April 1, 2021) Deutsche Telekom. Additional wholesale service providers are used for the legacy business with ADSL connections.
United Internet’s mobile internet products make it the leading MVNO in Germany.
As the sole MBA MVNO in Germany, United Internet has long-term, guaranteed rights to up to 30% of Telefónica Deutschland’s used network capacity, and hence extensive access to one of Germany’s largest mobile networks; these rights are held indirectly via 1&1 Drillisch AG, which it acquired in 2017. What is more, United Internet was one of the successful bidders in Germany’s 5G frequency auction in 2019, acquiring two frequency blocks of 2 x 5 MHz in the 2 GHz spectrum and five frequency blocks of 10 MHz each in the 3.6 GHz spectrum. This laid the foundations for building its own high-performance mobile network, so as to expand the value chain in this market in the same way as for with fixed networks. In February 2021, following a review by the European Commission, 1&1 Drillisch decided to accept an improved offer for national roaming from Telefónica Deutschland. If the contract is signed (scheduled for roughly mid-May 2021 according to the offer), this would represent another major precondition for the construction of our own network. Apart from its privileged access to Telefónica’s network, the organization also purchases standardized wholesale mobile network services from Vodafone.
The purchased network services are enhanced with end-user devices from well-known suppliers, and proprietary applications and services, setting it apart from its competitors.
The mobile internet products are marketed via the premium 1&1 brand and discount brands such as yourfone and smartmobile.de, allowing the organization to offer the mobile network market a comprehensive range of products while also addressing specific target groups.
United Internet’s Business Access Segment offers a comprehensive range of telecommunications products and solutions to business customers under its 1&1 Versatel brand.
At the heart of 1&1 Versatel’s business model is a state-of-the-art fiber-optic network approximately 50,900 km in length, which is one of the largest in Germany and is being continuously expanded.
1&1 Versatel uses this to offer companies telecommunications products ranging from direct fiber-optic connections to customized, individual telecommunications solutions (voice, data, and network solutions). In addition, the 1&1 fiber-optic network is used for (wholesale) infrastructure services for national and international carriers and ISPs.
The fiber-optic network directly connects commercially used buildings and government sites (“FTTB” = “fiber to the building”).
The Consumer Applications Segment is the home of United Internet’s consumer applications. These primarily include personal information management applications (e-mails, to-do lists, appointment/address management), and online (cloud) storage, along with domains, consumer website solutions, and office applications.
The portfolio has been successively expanded, and the GMX and WEB.DE brands – the largest e-mail providers in Germany for years – have been transformed in recent years from pure-play e-mail suppliers to end-to-end hubs for user communications, information, and identity management.
The consumer applications are largely developed in-house and operated in the Group’s own data centers.
The products are offered as pay accounts or ad-financed free accounts. The latter are monetarized using classic and increasingly also programmatic (i.e., data-driven) online advertising. United Internet Media is responsible for marketing.
United Internet’s business with these ad-financed and fee-based consumer applications is focused on Germany, Austria, and Switzerland in particular and uses the GMX and WEB.DE brands; the Company is one of the leading providers in this space.
This segment, like others, has also been driving forward its internationalization since taking over the US provider mail.com at the end of 2010. In addition to the USA, mail.com has a presence in other countries including the United Kingdom, France, and Spain.
United Internet’s Business Applications Segment opens up internet-based business opportunities for freelancers, self-employed professionals, and SMEs and helps them digitalize their processes. It does this by providing a broad range of high-performance applications such as domains, websites, web hosting, servers, cloud solutions, e-shops, group work, online (cloud) storage, and office applications that customers can use on a subscription basis.
Building on the hosting packages that have proven their worth millions of times, the product range has been expanded over the past few years to include numerous cloud-based e-business solutions.
The applications are developed in the Company’s own development centers or in cooperation with partner organizations, and are run on more than 90,000 servers in 10 data centers.
United Internet’s Business Applications Segment is also an international leader in its field, with activities in Europe (Germany, France, the United Kingdom, Italy, the Netherlands, Austria, Poland, Switzerland, and Spain, among other countries) and North America (Canada, Mexico, and the USA).
The business applications are marketed to specific target groups using a variety of differently positioned brands: IONOS, Arsys, Fasthosts, home.pl, InterNetX, Strato, united-domains, and World4You. In addition, United Internet offers customers professional, active domain management services under its Sedo brand, whereas CM4all (acquired as of February 1, 2021) offers other hosting providers a white-label website builder for creating high-quality websites.
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