Germany's rail regulator on Tuesday backed Italian train firm Italo in a case it brought arguing it had been unfairly excluded from the market, paving the way for foreign companies to compete with German state operator Deutsche Bahn.

The rail network in Germany is in poor condition, with passengers frequently complaining of late trains, cancelled services and ageing infrastructure.

Its woes hit a nadir last week when a radio communications system malfunctioned, crippling nationwide for several hours and leaving thousands of passengers stranded in trains.

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On Tuesday, the Federal Network Agency regulator sided with Italo in a case it brought against Deutsche Bahn for obstructing competition.