Press release

Fiber optic expansion continues to gain speed
BREKO market analysis20 shows: Alternative network operators are driving fiber-optic expansion in Germany

Fibre optic penetration rate rises to 13.5%; significant increase expected by 2023
Demand for fast internet connections grows strongly during the coronavirus crisis
Germans’ hunger for data strengthens the importance of the fixed network
Fibre optic growth: Germany is catching up in a European comparison

Together with telecommunications expert and economist Prof. Dr. Jens Böcker, the German Broadband Association (BREKO) today presented its latest analysis of the state of the telecommunications market. The results show a positive development of fiber optic expansion in Germany. The number of available fiber optic connections, the demand for fast Internet and investments in expansion are increasing. The drivers of this development continue to be the alternative network operators.
Prof. Dr. Jens Böcker, scientific director and author of the study, assesses the results positively: “The BREKO market analysis shows the existential importance of a high-performance telecommunications infrastructure for companies and private households, especially against the backdrop of the coronavirus pandemic. The focus on fiber optic expansion is being sharpened in the long term: investments in this infrastructure are of central importance for a successful future for Germany!” BREKO Managing Director Dr Stephan Albers agrees: “The importance of fiber optic expansion is clearer than ever. Digitalization is the evolution of our time, and fiber optics is the only infrastructure that can meet all the digital challenges of today and the coming decades. The current global crisis in particular makes it clear why we need this infrastructure so urgently. But the figures from the BREKO market analysis show: Progress is being made with the expansion of fiber optics.”
Fiber rate and investments on the rise: Growth of 1.1 million fiber optic connections; investments increased to 9.6 billion euros
The central message of the latest BREKO market figures: Progress is being made. The proportion of fiber optic connections to buildings and homes in relation to the total number of all households and companies (“fiber optic ratio”) has risen to 13.5 percent. This corresponds to an increase of 1.1 million to a total of 6.1 million fiber optic connections throughout Germany. At 4.9 million, the majority of these connections are being implemented by the so-called “alternative network operators”, i.e. Deutsche Telekom’s competitors. The pace of expansion will increase in the coming years: The BREKO market analysis20 forecasts an increase to a total of 22 million fiber optic connections by 2023 – 14.1 million of which will be implemented by alternative network operators.
BREKO President Norbert Westfal sees clear signs of the digital upswing: “We are finally in the fast lane when it comes to fiber optic expansion. In terms of digital infrastructure growth, Germany can continue to fight its way forward across Europe and currently occupies fifth place among the fastest growing fiber optic markets. The fiber optic penetration rate is also increasing significantly. Alternative network operators, in particular the BREKO companies, have played a major role in these positive developments. But of course we are still a long way from reaching our goal. Due to the failures of the past and the fact that copper connections have been held on to for too long, there is still a lot to do. It is now important to further increase the momentum of fiber optic expansion. There is a great opportunity for this in the coming months. The upcoming fundamental revision of the Telecommunications Act must clearly set the course for genuine fiber optic expansion. We will work hard to achieve this. In addition, the significantly increased awareness of digitization among citizens and companies will also give a boost to fiber optic expansion.”
Investments in digital infrastructure rose to a total of €9.6 billion in 2019. The alternative network operators also dominate here. At 5.2 billion (54.1%), they are financing well over half of the expansion.
Data hunger grows significantly during the coronavirus pandemic: demand for fibre optic connections at a high level
The demand for data volumes from private households and companies continues to rise, and with it the demand for real fibre optic connections. At 42%, the take-up rate for fiber optic connections is twelve percentage points higher than that of cable network connections (30%). The coronavirus pandemic is also having a strong impact on demand for fast internet. 49% of existing customers asked for a tariff upgrade with a higher bandwidth. Network operators also identified a need for higher-quality connection products among 43% of new customers. Reliability/stability as well as download and upload bandwidth have become particularly important features of the internet contract booked by private and business customers in the current situation. Business customers also consider the security of the connection to be increasingly important.
According to Stephan Albers, the industry is aware that high-performance Internet access has become systemically relevant during the pandemic: “Our network operators are making an important contribution to our ability to overcome the crisis. We are aware of this responsibility. Corona has impressively demonstrated this: We need to build future-proof fiber optic networks. Security and stability, the advantages of the fiber optic network, are becoming increasingly important. The future belongs to ‘fiber to the home office’. It is also important that fiber optic networks are not only more efficient, but also represent the most sustainable digital infrastructure due to reduced power consumption and therefore contribute to climate protection. In order for us to be able to take advantage of these benefits, however, everyone has to get involved. The BREKO companies will make their contribution to this.”
Mobile communications will not replace the fixed network in future either
Fixed network connections continue to play the decisive role for data transport in Germany. The ratio of data volume transmitted via the fixed network and mobile network remains stable at around 132 GB (fixed network) : 1.6 GB (mobile network). This means that almost 99% of data is transmitted via the fixed network. A replacement of the fixed network by mobile communications is therefore still not discernible and is not to be expected in the future.
Despite funding programs, the majority of the expansion is self-economic
The BREKO network operators continue to focus clearly on self-economic fiber optic expansion. Despite ongoing subsidy programs, 75 percent of all expansion projects are self-built. Norbert Westfal: “The new BREKO market analysis underlines the fact that the lion’s share of fiber optic expansion is being carried out by the operators themselves. Without any subsidies. This is due to the fact that self-economic expansion can be implemented faster, more efficiently and in a more market-oriented manner. Funding projects are by nature lengthy and associated with many challenges. It is therefore important to continue to improve the framework conditions for self-economic expansion and reduce bureaucracy. Nevertheless, state funding is important as a supplement, but it must be used in moderation and only where the supply to citizens and companies is particularly poor. Money alone does not build networks.”
195 network operators across Germany were surveyed for the BREKO market analysis20 . In addition, data from publicly available sources was used for verification and to determine overall market figures. The research of the market data and the analysis of the survey results were carried out by the strategy consultancy Böcker Ziemen Customer Insight Consultants together with BREKO.