Study: Every year 40 lakh houses will have to be connected with fiber optics

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The federal government is aiming for “fibre optics for all” by 2030 in its gigabit strategy. That target is likely to be pushed back by at least four years, according to a market study published by broadband association Anga on Thursday to mark its 50th anniversary celebrations.

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This also applies when the benchmark is not the actual connection to the fiber optic network that is actually desired, but rather “homes passed”: this means that a home is considered “supplied” even if the fiber optic connection is to the apartment. May not be laid out or house, but the property is in a least developed area. One house connection is still missing. Industry representatives insist this doesn’t help anyone. “You pay well with ‘Homes Passed’ Germany,” says Timo von Leppel, CEO of NetCologne.

In 2023, the proportion of homes connected by fiber optics was between 37 and 40 percent, depending on where the home is. To achieve the target of full coverage by 2030, about 28 million households will have to be added over seven years, calculates Goldmedia, the consulting firm appointed with the analysis. On average this will be 4 million per year. This number does not seem unattainable. However, expanding companies have recently predicted slow growth and failure to reach the 100 percent target.

Fiber optic extension is becoming more difficult in rural areas

Focusing on residential buildings that have not yet been developed, the researchers say: 60 percent of these are in semi-urban or rural areas. House development in the country is on average more complex than in the city because the civil engineering work involved covers much longer distances. To achieve the target of passing 1,000 new houses, about 700 residential buildings need to be developed in rural areas, which is more than double that of urban areas.

Goldmedia also believes that 40 percent of homes with FTTB/H expansion have been successfully reached through cities and suburbs that are disproportionately served by multi-family homes. Of the total 19.6 million residential buildings, 13.4 million still need to be developed to meet the government target. This includes 68 percent of all residential buildings, or nearly half of multi-family homes, and 72 percent of single- and two-family homes.

The authors write that at least 1.9 million more residential buildings will need to be developed every year by 2030. Over the past three years, the average growth was only 1.3 million residential buildings per year. “Following this development path, the 2030 target is likely to be missed,” the authors say. “The entire supply will not be achieved until 2034 at the earliest.” However, this is an optimistic scenario: many network operators are currently focusing primarily on increasing the usage of their lines with the help of higher take-up rates (“home activated”).

Bandwidth hunger is increasing

What fiber optic providers have on hand: Experts predict that by 2030 the average connection data load will increase by 2.4 to 3.7 times. The “trend scenario” speaks of the former, according to which the amount of data per connection will more than double and power users will receive more than 3 terabytes of traffic volume per month. If new technologies such as virtual reality (VR) or artificial intelligence (AI) achieve success, the average data traffic per connection would increase significantly to around 1,300 gigabytes per month in a “likely scenario”. Then the average monthly traffic of large consumers will be about 5 terabytes. These heavily used connections generated approximately 76 percent of the bandwidth requirement in 2030, amounting to 457 billion gigabytes per year.

Goldmedia states that 53.7 percent of data usage in Europe in 2023 will already be on video. In particular, the increasing share of live streaming increases the traffic volume and requires higher bandwidth reserves for stable broadcasting. Additionally, gaming, social media and VR in the cloud increased the appetite for bandwidth. “The connection requirements of emerging network applications can no longer be met by existing DSL connections,” the study finds. “In the medium term, this will strengthen demand for high-performance gigabit connections and fiber optics in particular.”

The root of the matter is the closure of the copper network

The analysis also shows that, especially in areas where only fiber optic networks are economically viable, the competitively neutral and non-discriminatory shutdown of Deutsche Telekom’s copper network represents a further significant incentive. This is the only way competitors can realize the existing regional marketing potential for fiber optic connections.

According to the study, telcos have no economic interest in shutting down their copper networks and switching to their optical networks in Challenger’s fiber optic expansion area. Only when copper network usage falls below 20 percent will competitors’ fiber optic networks represent an affordable alternative. Such customer migration cannot be expected if DSL networks are maintained. From the telco’s point of view, it makes sense to shut down copper lines as soon as possible in areas where it is installing fiber optic networks itself. Voluntary, non-discriminatory copper-glass migration by the Magenta Group cannot be expected.

To prevent telecoms from blocking nationwide fiber optic expansion and building on competitors’ existing gigabit networks, Anga is calling for “copper-glass switching to be designed to be competition-neutral.” The federal network agency should develop an overall concept with the participation of all interest groups. As a minimum requirement, Anga says telcos must submit applications to switch off their copper networks in both their own and competitors’ fiber optic network areas. End customers must be able to choose freely among the available offers. In addition, the interests of competitors who wish to use access through the telecom network must be protected. Industry associations VATM and Breco also make similar appeals to regulators and politicians.

“We have to bridge the gap between ‘homes passed’ and ‘homes connected’ – even better, ‘homes activated’ – together,” said Stefan Schnorr, state secretary of the digital ministry, at Anga’s 50th anniversary celebration in Berlin on Thursday. ” “But politics can only set the framework conditions for this.”

The industry is emphasizing speed. “Action is urgently needed,” ANA President Thomas Braun warned in Berlin on Thursday afternoon. “Time is of the essence.” NetCologne CEO von Lepel said network operators are now expecting “clear outline conditions” from politicians. Given the failure of the traffic light coalition and the federal government crisis, the industry now fears further delays.

(vbr)

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