Compared to its neighbors, especially in Northern Europe, Germany is lagging far behind when it comes to expanding faster Internet connections – a result of poor strategic decisions decades ago. But now something is happening. Investors have recognized that there is a growth market here and are investing heavily in the expansion of fiber optic lines in Germany. This is also noticeable in the number of available connections. According to figures from VATM, the association of Deutsche Telekom’s competitors, around 1.7 million new fiber optic connections will be available in the six months from the end of 2021 to June 2022 alone. A total of 35.8 million households could then use the Internet with download speeds of one gigabit per second (1000 Mbit/s) or more.
“Investors have discovered fiber optic expansion in Germany for themselves,” says VATM President David Zimmer. The majority of the 50 billion euros that are to flow into the expansion of fiber optic lines in the next few years would be shouldered by the VATM members. In their expansion plans, these are concentrating on areas that have so far been underserved, i.e. on smaller towns and rural communities.
In larger cities, on the other hand, there is often a good supply, also through TV cable providers. Their copper cable, a so-called coaxial cable, uses its own transmission standard, Docsis 3.1, and thus also achieves gigabit speeds. However, the expansion of these networks has largely been completed; by June, only around 100,000 new ones are expected to be added from the end of 2021. More fast connections will be created with fiber optic technology.
Only around a third signs contracts for high-speed Internet
The VATM expects that by the end of 2022, around 38 million households will be able to use a gigabit-capable Internet connection, which would correspond to 90 percent of all 41.9 million households in Germany. Almost a third of them can do this via a fiber optic connection. However, by no means all households that have the opportunity to do so use such fast Internet access. Of the total of 35.8 million possible high-speed connections, only 12.3 million are actually booked and often not at the maximum possible speed for cost reasons. Only 18 percent of customers use speeds of one gigabit or more with gigabit-capable connections.
However, this is likely to change in the future: “The demand for high-bit-rate connections will continue to increase, since more and more applications require this high bandwidth,” explains telecommunications expert Torsten Gerpott from the University of Duisburg-Essen. The association of telecom competitors is calling on the former monopolist to compete fairly. Telekom must “play fairly and not rely on superstructures or strategic joint relocation, which often delays expansion in rural areas or makes it economically impossible,” says VATM President Zimmer.
What he means by that: Telekom should not expand where competitors are already active or try to lay its own lines with an expansion. “We have to build together and not against each other,” says Zimmer. Instead, existing lines from a competitor can be rented – open access is the technical jargon. This is now common practice for VATM members. New partnerships are concluded almost every week.
Future-proof technology
Germany is lagging behind in the expansion of fiber optic networks mainly because decades ago the decision was made to rely on copper cables. However, these cannot transmit data nearly as quickly as glass fibers or coaxial cables. With techniques such as vectoring and supervectoring, it was possible to achieve download speeds of up to 300 megabits per second (Mbit/s), but only if the next gray box on the street was almost in front of the house. The further away this so-called DSLAM is, the less data the line can transport due to the increasing resistance.
Because many customers have bandwidths of 50 or 100 Mbit/s, there are still many such connections. The majority of these are in the hands of Telekom, which has to rent them out to competitors. With fiber optic lines, on the other hand, the distance is irrelevant for the customer, even if the light signals have to be refreshed over longer distances. With fiber optics, bandwidths of more than 1000 Mbit/s are already possible today, and business customers can even get connections with up to 100 gigabits per second. They are therefore considered to be very future-proof.