2023-12-12 18:28:21
The need for data is increasing significantly in the Internet age. A nationwide fiber optic network is intended to make Germany fit for the masses of data at the end of this decade. The fiber optic map of Germany is now turning more and more magenta.
Bonn.
Deutsche Telekom has significantly accelerated its fiber optic expansion. By the end of the year, the fiber optic network will be available in more than 8 million households, more than 2.5 million more than a year earlier, the company announced on Tuesday. It has been expanded in almost 3,500 German cities and communities. In 2021 the increase was 1.2 million and in 2022 it was already 2 million. The group wants to maintain the current pace of expansion. By 2030, the target is between 25 million and 30 million households. “We are doing very well,” said Telekom Germany boss Srini Gopalan. The competition also relies on fiber optics, but is not as advanced as the Magenta group.
“Fiber to the Home” (FTTH) is considered the best technology for stable and fast Internet. The federal government has set the goal of enabling nationwide fiber optic coverage by the end of this decade. Other technologies are considered obsolete: connections via telephone lines (VDSL) are prone to fluctuations and are relatively slow. Although television cables are significantly better than thin telephone lines, they are also susceptible to fluctuations: If the whole neighborhood is streaming in the evening, the connection rate drops. In addition, the need for data is increasing due to high-resolution films, virtual reality applications and computer games.
The proportion of users is still low
Telekom’s billions in spending are an investment in the future – at the moment they are not yet financially worthwhile, as the figures published on Tuesday made clear. Because many households forego the relatively expensive FTTH contracts. Their previous cheaper connections with weaker performance are enough for them.
Of the eight million households with Telekom fiber optics on their doorstep, only around a million have accessed it so far – so the proportion of users is around 13 percent. In addition, there are 700,000 households that have already signed a contract in what is known as pre-marketing. These households are still waiting for the expansion, which is scheduled to take place in the next two years. Once it’s finished, you’re guaranteed to become a customer.
This activation rate is significantly higher for competitors. At the Düsseldorf company Deutsche Glasfaser, which had laid lines to more than two million households by the end of September, it is 30 percent. Telekom manager Gopalan justified his company’s relatively low value by saying that availability is being increased significantly and the percentage value is therefore inevitably low for the time being. However, he is convinced that the percentage will be higher in 2024 and 2025.
“Demand is increasing,” Gopalan said. The number of fiber optic customers has increased by 60 percent so far this year compared to 2022. “It’s increasing quarter after quarter.” Gopalan was convinced that there were 68,000 new fiber optic customers in the first quarter, 78,000 in the second and 85,000 in the third. So things are going up significantly – this trend will continue.
Vodafone with a late start
While Telekom is making headway when it comes to fiber optics, its competitor Vodafone is struggling to get a connection after a late start. For a long time, the company relied on Internet with television cables. The fiber optic business was more of a niche existence. Finally, Vodafone went all out and founded the company OXG with a Luxembourg investment partner in 2022, which began the FTTH expansion in September 2023. OXG has now initiated construction projects in 13 cities, where a total of around 330,000 households are to be connected directly to the fiber optic network. The modern lines are expected to be in seven million households by the end of 2029.
Cell phone network is getting better
Mobile communications are also making progress. Telekom’s mobile phone coverage with the 5G radio standard is now 96 percent of households, two percentage points more than a year ago. Vodafone is at 91 percent. With O2 it is more than 90 percent. Telekom wants to reach 99 percent of German households with its 5G antennas by the end of 2025.
When it comes to the 5G network, Telekom’s competitors have long been using the so-called 5G standalone (5G SA) – i.e. “real” 5G, which does not use 4G hybrid technology. 5G SA offers extremely low response times. This improvement to the previously used fifth generation of mobile communications could be important for mobile games and for good transmissions in large crowds. Telekom has not yet launched 5G SA – also called “5G plus” – for private customers. This should not happen until the second half of 2024. Only then will it be worthwhile for customers, according to the company, because then there will be enough applications for which 5G SA is also important.
Debate about expansion funding
Part of the fiber optic expansion is made possible through government subsidies. However, the private sector is not very enthusiastic about the fact that billions of euros will probably be available next year to enable FTTH connections in rural areas and on the outskirts of cities.
In a letter published on Tuesday, several digital industry associations, including the Federal Association of Broadband Communications, demanded that the federal government only provide one billion euros in each of the next three years and not three billion euros each as planned. They fear that lengthy application procedures will slow down the expansion overall and that construction capacity will be tied up in lower-ranking projects, even though they are more urgent elsewhere. (dpa)
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