At Anga Com 2023, there were intensive discussions about the current status of fibre roll-out in Germany, the challenges with regard to approval procedures for subsidised roll-out, the competitive situation and overbuilding by some network operators, as well as developments towards open access on the new fibre networks, for more efficient use of the networks and competition in the range of services. All of this is flanked by the changes in the housing sector in mid-2024 due to the abolition of the ancillary cost privilege and the associated competition for access to apartment buildings and housing associations.

Fibre optic expansion is progressing noticeably, albeit too slowly, and almost every public utility and network operator is active in this area in order to build new fibre optic networks at the municipal, regional, supraregional or national level in order to be able to offer internet and services later. It is well known that especially in the case of subsidised expansion, bureaucratic hurdles must be overcome, approval procedures must be accelerated and wild double expansion must be prevented. To this end, the network operators, associations and industry are called upon to quickly implement changes that will guarantee the actual goal of a fast, nationwide expansion (also in rural areas) and access to broadband internet for every household in the foreseeable future.

At the same time, the roll-out of the own-account network is progressing, which in principle can be implemented more quickly, but which must fulfil even more economic criteria. If the expansion cannot be realised economically via pre-marketing, it must be reacted to quickly in order to enable a subsidised expansion, if necessary, so that unattractive communities are not left behind.

All this means a high input of resources in terms of planning, monitoring of the procedures, expansion and a high input of capital. In the end, the question remains whether, how and when the investments will pay off. If you talk to financial investors today, you can feel increasing restraint, where 1-2 years ago there was almost unlimited euphoria and positivism. Also, the first cases of failure have become obvious, companies are withdrawing or liquidating. This is obviously the effect of overfinancing and the reality check that the expansion is progressing much more slowly due to limited construction capacities, while competition in the market is increasing at the same time, as Deutsche Telekom and Co. are now fighting massively for end customers and are creating competition with fibre-optic internet and services quickly and comprehensively, both with their own expansion and with cooperation.

Here, more than ever, the question arises: how can a network operator hold its own against the large, national market participants and how can the new fibre-optic internet be made palatable to the end customer?

The answer lies in attractive product offers and attractive services.

Today it is no longer sufficient to advertise high bandwidths, when a large number of customers have either been living with poor internet and low bandwidths for years (e.g. in rural areas) and are already happy if 25-50 Mbit/s were available, or can already use 50-300 Mbit/s with VSDL or Docsis and do not see any need for significantly higher bandwidths, at least in the short term.

In the area of residential property owners and the housing industry, the argument is that fibre optic connections will enhance the value / attractiveness of properties, which may certainly be true in the medium term, but will only be successful in the short term if the changeover from the previous infrastructure to fibre optic does not incur any costs (for house connection and house distribution). This means that the network operator is asked to bear these costs, even if, for example, in apartment buildings only part of the tenants are willing to switch. Also, with fibre-optic internet it is hardly possible to achieve higher prices with comparable bandwidths, so what remains is a bet on the future with more bandwidth demand, upgrades to the internet line and thus higher revenues.

Presumably, however, competition will then ensure that prices fall and put this optimistic vision of the future into perspective.

In order to move customers to higher bandwidths and to be able to compete with the big players on the market, it is becoming increasingly important to be able to offer an attractive service portfolio for private and business customers.

In the case of internet and telephony, quality and stability are decisive factors in addition to the price-performance ratio. Here, network operators are required to ensure with processes and monitoring that customers receive an uninterrupted internet product and can offer telephony (VOIP) with the best availability and voice quality.

For the only “visible” service, television (IPTV), much more is required than a stable and high-quality product. With its own TV product, the network operator has the chance to bring its brand into the living room (and the whole home) of the end customer and to be visible. However, this visibility also means that both a positive and a negative product experience have a direct impact on the image of the network operator.

In the positive case, a network operator with a modern TV product and new functions (such as replay, restart, pause TV, use on all end devices in the entire house / flat) and an extensive content offer with regional content and convergence with streaming services manages to positively stand out from the competition and create a customer loyalty that lasts in the long term and does not let the end customer switch to the next cheaper offer. Even if streaming services are on everyone’s lips and certainly take up a share of the time spent watching moving images, modern television (live for sporting events or other events) or time-shifted, with a rich content offering, will be an indispensable part of private households for a long time to come.

Today more than ever, TV is an important pillar in the offer of a network operator and is actually indispensable for a service offer around fibre-optic internet.

It remains to be seen how quickly the aforementioned general conditions surrounding the expansion, how the competitive situation of the network operators will develop and how the price structure will look in the future – one thing is certain, however, there will be a lot of change and 2024 will be a decisive year for network operators in Germany.