Fibre-optic coverage in Germany at 35.6% by mid-2023
Deutsche Telekom’s competitors are investing more than ever in Germany’s digitalization with EUR 8.4 billion.
Double expansion by Telekom jeopardizes the federal government’s fibre optic targets: reported cases in more than 220 municipalities
Schleswig-Holstein remains the frontrunner in a state comparison. Brandenburg with largest increase in fiber optic connections

Bonn, 30.08.2023 With the BREKO Market Analysis 2023 published today, the German Broadband Association (BREKO) shows that Germany is well on the way to achieving the federal government’s expansion targets with a fiber optic coverage of 35.6% (as of 30 June 2023). With record investments, Deutsche Telekom’s competitors are ensuring a high pace of network expansion, especially in the roll-out of fiber optic networks for their own use. In addition to long-standing hurdles such as a shortage of skilled workers and slow approval procedures, the tactical double expansion of fiber-optic networks in particular threatens to put the brakes on expansion.

Together with telecommunications expert and economist Prof. Dr. Jens Böcker, the German Broadband Association (BREKO) today presented a current analysis of the status of fiber optic expansion in Germany. In addition to data from the more than 240 network operators organized in BREKO, the BREKO Market Analysis 2023 is based on expansion figures from all relevant companies involved in fiber optic expansion in Germany and is therefore representative of the German telecommunications and fiber optic market. The expansion figures reflect the status at the end of June 2023. In addition to nationwide data, the analysis also contains figures on the status of fiber optic expansion in the federal states.

Strong growth in fiber optic availability

Study author Prof. Dr. Jens Böcker highlights the considerable progress made in the expansion of fibre optics over the past twelve months: “In the face of numerous challenges, companies are continuing to set a good pace in the expansion of fibre optics: Thanks to 4.6 million newly connected households, companies and public institutions, the fiber optic rate has risen by nine percentage points to 35.6 percent since June 2022.” This means that fiber optic connections to the building or home are available to 17.3 million households, companies and public institutions – more than a third of Germany.

Deutsche Telekom’s competitors account for 64 percent of investments and 67 percent of fiber-optic expansion

With reference to the forecast of the BREKO Market Analysis 2023 that, depending on the framework conditions, Germany will achieve fiber optic coverage of between 46 and 60 percent by 2025, BREKO President Norbert Westfal, CEO of EWE Tel, comments: “With investments of more than eight billion euros, Telekom 2022’s competitors have made a clear commitment to nationwide network expansion and to Germany as a business location. Despite numerous challenges, the industry is therefore well on the way to achieving the federal government’s goals of supplying half of Germany with fiber optics by 2025 and all of Germany by 2030. However, in order to maintain the current pace, we need optimal framework conditions for the strong expansion of fiber optics for the private sector. In particular, the federal, state and local authorities should reduce bureaucracy by accelerating the nationwide digitization of approval procedures on the basis of the broadband portal. In order to further accelerate the procedures, the Federal Ministry for Digital and Transport Affairs (BMDV) should revise one important aspect of its draft Network Expansion Acceleration Act published yesterday: Fiber optic expansion should not only be defined as ‘in the public interest’, but as ‘in the overriding public interest’ – analogous to the expansion of renewable energies.”

Strategic dual expansion jeopardizes achievement of political fibre optic targets

Other hurdles that could prevent the best-case scenario of 60% fiber optic coverage in 2025 include the acute shortage of skilled workers, increased expansion costs and reluctance to buy due to continued high inflation. However, the biggest threat to rapid nationwide fiber optic expansion is currently the announced or actual double fiber optic expansion by Telekom. According to BREKO’s findings, by July 2023 all federal states were affected, 223 municipalities, most of them in North Rhine-Westphalia and Bavaria, as well as 74 of Telekom’s competitors. In twelve percent of cases, a competitor has already partially or completely withdrawn its expansion project. In every tenth case, a fiber optic network financed with state subsidies is even being built over.

“Deutsche Telekom’s competitors are responsible for two thirds of the fiber optic rollout and are thus making a decisive contribution to the creation of a sustainable digital infrastructure for the whole of Germany. Fair competitive conditions are the basis for this success. However, the cases reported to us of dual fiber optic expansion by Telekom and Glasfaser Plus in more than 220 municipalities in all federal states currently threaten this basis. The federal government and the Federal Network Agency must now take immediate countermeasures so as not to jeopardize the achievement of the political expansion targets,” demands BREKO Managing Director Dr. Stephan Albers.

Open Access is catching on

The market analysis clearly shows the growing importance of Open Access, the opening of existing fiber optic networks to other providers, for which BREKO presented a concrete definition last week in order to lay the foundation for an industry standard and even more Open Access cooperations. 71 percent of the network operators organized in BREKO already offer interested service providers access to their fibre optic networks and generate an average of 18 percent of their total revenue with this. 22 percent plan to offer open access in the future. Almost three quarters of the companies expect a strong increase in the importance of the Open Access business. “Tactical double expansion of fiber optic networks makes no economic sense and there is already a functioning alternative to enable fair competition: More and more companies are concluding Open Access agreements and thereby increasing the utilization of existing networks, while end customers benefit from a greater variety of providers,” says Albers, summarizing the advantages of Open Access.

Schleswig-Holstein remains front runner; Brandenburg is catching up fast

There are major differences in the progress and speed of fiber optic expansion between the federal states: Schleswig-Holstein is further ahead with fiber optic coverage of 82%, followed by Hamburg with 72% and Brandenburg with 54%. The latter is also the federal state with the largest increase in available fiber optic connections: Compared to the same period last year, the number of available fiber optic connections in Brandenburg has more than doubled. Baden-Württemberg, on the other hand, has only improved by six percentage points and, with fiber optic coverage of 23%, is still in last place among the federal states.

State funding takes a long time

Based on current figures from the BMDV, the BREKO market analysis also provides an insight into the status of the federal government’s gigabit funding: Of the 17 billion euros in federal funding for fiber optic expansion made available by the federal government since 2015, 13 billion had been provisionally approved for specific expansion projects by August 2023, but only 3.5 billion – a good 20 percent – had been disbursed. In conjunction with the result of the potential analysis commissioned by the BMDV, which shows that 91% of German households, companies and public institutions can be connected to fiber optics on their own, this balance leads to a clear conclusion: government funding measures supplement the roll-out of fiber optics on a private-sector basis in order to achieve nationwide coverage, but are not an effective means of accelerating the roll-out.

Telecommunications companies are increasingly focusing on sustainability

Another key topic of the BREKO Market Analysis 2023 is the importance of sustainability in the telecommunications industry. Böcker: “Sustainability is clearly moving into the focus of telecommunications companies, which has already led to numerous measures. The industry is proactive and is discussing its own industry standard for sustainability.”

The BREKO Market Analysis 2023 and associated infographics can be downloaded here: https://www.brekoverband.de/schwerpunkte/breko-marktanalyse/

We are happy to provide journalists with open files of the infographics on request.