Germany’s Broadband market , one of the most fragmented in the world, is beginning to witness the the consolidation we’ve been predicting for some time.  United Internet’s purchase of Freenet’s DSL unit propels the operator into the second place slot in the German market.  Meanwhile Telecom Italia’s Hansenet unit is on the auction block, and rumor on the street is that Telefonica is a likely acquirer.

Overall, it was a down quarter for Germany; operators added only 727,000 residential broadband subscribers in Q209, compared to 1.1 million in the same quarter last year. This represents one of the lowest quarters in terms of residential net new additions in recent years.

The small number of additions this quarter reflects the rapidly maturing German market— approaching 66% broadband penetration at the end of 2009. A highly fragmented market, Germany claims over seven major broadband service providers (BSPs) with a combined share of nearly 90% of the market. Strategy Analytics expects to see continued M&A activity in the upcoming year.