Omdia analyst Julia Schindler has revealed what’s delaying the deployment of fiber that can boost broadband in Germany.
Germany is working to achieve its goal of covering 50 percent of households with FTTH/B (fiber-to-the-home/building) by the end of 2025, according to the latest Omdia report.
However, as of mid-2024, only 36.8 percent of households have been passed, leaving a significant 13-percentage-point gap to close, Julia Schindler, Senior Analyst, Europe Service Provider Markets at Omdia, said. The report did not reveal investment in FTTH business.
Fiber deployment has slowed, with growth over the past year limited to just 7 percentage points. Operators like Deutsche Telekom are deploying at full capacity, adding 2.5 million new homes passed per year, but reaching the 2025 target will require a substantial acceleration, relying on contributions from alternative network providers to bridge the gap of over 5 million households.
While deployment has faced challenges, Germany has made notable improvements to rollout conditions compared to previous years. Efforts to simplify and digitalize approval processes, initiated by the Federal Ministry of Transport and Digital Infrastructure in 2022, have seen significant progress, with 87 of 100 announced measures implemented as of October 2024.
Costs are being reduced through alternative deployment methods, such as reduced-depth underground installation, which lowers costs from €85 to €65 per meter. Many communities favor traditional methods, slowing the pace of rollout, and the most cost-effective option, overground deployment at €10 per meter, remains underutilized.
Despite increasing the number of homes passed, Germany lags in fiber adoption, with fiber accounting for only 13 percent of broadband subscriptions in 3Q24 and a take-up rate of 14.4 percent.
Deutsche Telekom, which aims to add 450,000 new fiber customers in 2024 (up 50 percent from 2023), plans to increase new fiber customers to 1 million annually by 2027. However, Germany’s fiber penetration and utilization rates remain among the lowest in Western Europe, with operators setting modest take-up targets compared to peers like BT’s Openreach in the UK.
Deutsche Telekom recently said a record 131,000 customers opted for a fiber plan in the third quarter of 2024. This compares to 77,000 FTTH lines activated in the prior-year period. Broadband net adds totaled 38,000. 49 percent of retail broadband customers now use a rate plan offering speeds of up to 100 MBit/s and more. The number of new TV customers increased to 76,000, up from 51,000 TV net adds in the prior-year period.
Discussions around copper-to-fiber migration are gaining traction, but with approximately 60 percent of households still lacking fiber coverage, a large-scale copper switch-off is unlikely before 2030. Germany recently completed its first three copper-to-fiber pilot projects, initiated by the Gigabitforum, a collaborative effort led by Bundesnetzagentur.
These projects aim to provide insights for future migrations and develop comprehensive plans covering consumer and competition policies. While progress is being made, DSL is expected to remain active in many regions well into the 2030s. Achieving Germany’s full-fiber ambitions will depend on accelerating deployment, increasing fiber adoption rates, and addressing existing infrastructure challenges.
Baburajan Kizhakedath