This opinion piece analyzes the current state of fiber deployment in Germany and progress toward 2025 targets.
Summary
Germany aims to cover 50% of households with FTTH/B by the end of 2025, but with only 36.8% of homes passed as of mid-2024, it has a wide gap to close. Operators are working at full capacity, but progress continues to be hindered by bureaucratic challenges and high deployment costs, although conditions have significantly improved compared to previous years. Copper-to-fiber migration discussions are becoming increasingly prominent, but due to the lack of coverage, Omdia expects the gradual switch-off to be slower than in many other European countries.
Fiber deployment slowed in 2024, making the 2025 target more challenging
Fiber deployment remains the key priority for German broadband operators as the country aims to cover 50% of households with FTTH/B by end-2025. However, it is still 13 percentage points short of achieving this target, with 36.8% of households covered at the end of June 2024, according to Germany’s central information platform, Breitbandatlas (see Figure 1). Growth over the last twelve months has slowed down to 7 percentage points, and operators will need to ramp up their deployment pace significantly to achieve the 50% mark. Deutsche Telekom confirmed that it is deploying fiber at maximum capacity and will maintain its current run rate of 2.5 million additional new homes passed per year. The 2025 goal is not out of reach for Germany, but with a gap of more than 5 million households, a lot will depend on altnets to achieve the target.
Figure 1: Historical and target FTTH/B coverage and percentage growth, 2020–25
Notes: 2020–24 refers to mid-year data, 2025 to end-year target.
Source: Breitbandatlas: Gigabit-Grundbuch.
On the cost side, there is also a growing tendency by municipalities to accept alternative deployment methods, which helps to drive down costs and accelerate the pace of deployment. According to Deutsche Telekom, traditional underground deployment costs around €85 per meter, while underground deployment with less invasive methods at a reduced depth would drive down costs to €65. However, some communities still insist on traditional deployment methods, which slows down the rollout pace, and the cheapest and fastest option (overground deployment at just €10 per meter) remains rare.
The growing number of homes passed needs to be translated into active customers for operators to monetize the capex-heavy rollout. Yet fiber migration remains slow: Omdia estimates that fiber accounted for 13% of broadband subscriptions in 3Q24, which leaves Germany still among the countries with the lowest fiber penetration in Western Europe, alongside Belgium and Austria.
At its network-focused event, Netzetag, held in November 2024, Deutsche Telekom announced that it would be able to reach its target of 450,000 new fiber customers in 2024, an increase of 50% compared to 2023. The operator aims to increase the number of new fiber customers to 1 million per year by 2027. While the number of customers is growing, overall migration remains slow, with a take-up rate of 14.4% in 3Q24, compared to 13.2% in 3Q23. Deutsche Telekom aims to increase the utilization rate to 20% by 2027. However, this is a low target and below that of most other European operators; for example, the UK incumbent (BT’s Openreach), which also only ramped up fiber deployment pace in recent years, aims for 40–55% take-up by 2030. However, its current take-up rate is already much higher than Deutsche Telekom’s (34% in 1Q24).
Copper switch-off will not be a near-term possibility
With growing fiber coverage and the government’s plan to provide full fiber coverage by 2030, discussions around the copper-to-fiber migration are becoming increasingly prominent in Germany. Altnets are demanding Deutsche Telekom’s copper switch-off to accelerate customer migration to fiber, but with around 60% of households not yet covered, a large-scale copper switch-off will not be achievable by 2030. Omdia expects that it will be a slow step-by-step process, and DSL will remain active in many regions well into the 2030s.
Germany recently completed its first three copper-to-fiber pilot projects, which were launched under the Gigabitforum in February 2024. Gigabitforum is a group of experts set up and led by Bundesnetzagentur that includes telecom operators, other key representatives of the telecom industry, the Federal Ministry of Digital and Transport, federal states, and the research institute WIK. In addition to further work with Gigabitforum, Bundesnetzagentur commented that it plans to develop an overall concept for fiber migration with the Federal Ministry of Digital and Transport as a next step, which will cover consumer and competition policies. The completion of the three pilot projects is the first step in Germany’s DSL decommissioning path, and findings will help to create switch-off concepts and improve planning certainty for operators and other industry stakeholders.
Appendix
Further reading
Germany: Service Provider Market Report – 2024 (April 2024)
Forecast Update: Germany – 2024 (July 2024)
Fiber Homes Passed Tracker – 2Q24 (November 2024)
“FTTH Conference 2023 Wrapped: Germany’s path to nationwide fiber remains bumpy” (April 2023)
“Deutsche Telekom doubles down on AI and global scale in 2027 growth strategy” (October 2024)
“Digital Consumer Insights survey highlights Europe’s speed divide, and reluctance to upgrade” (October 2024)
Author
Julia Schindler, Senior Analyst, Europe Service Provider Markets
