In order to connect even more households in Germany to the fast Internet, fiber optic expansion is currently very popular. However, one provider now had to file for bankruptcy. The operation should (for the time being) be continued.
We are talking about fiber optic direct. The regional provider markets its up to 1 Gbit/s fiber optic connections primarily in Bavaria, but also in Hesse and North Rhine-Westphalia, for example. fiber optics direct has already connected around 25,000 households to high-speed Internet. Customers can choose between the three tariffs Basic, Premium and Giga, with the regular prices starting at EUR 39.90 per month. But now the Internet provider based in Cologne had to file for bankruptcy. However, the company wants to continue business operations, emphasizes fiber optics direct.
Withdrawal by investors drives providers into bankruptcy
Attorney Mark Boddenberg from the Cologne law firm Eckert was appointed as the provisional insolvency administrator. He now has to review the documents and plan how to proceed. The 60 permanent employees will initially keep their jobs, but 17 employees on a probationary period will not be taken on, writes the magazine “WirtschaftsWoche“.
The reason for the insolvency of fiber glass direct is the withdrawal of an important financier. The British investor John Laing originally announced that he wanted to invest around one billion euros in fiber optic expansion in Germany. In 2021, however, he was taken over by the US private equity group KKR, which, like many other financiers, has reconsidered its investments due to the current difficult economic conditions and the uncertain interest rate situation. John Laing has therefore decided to withdraw from fiber optic expansion in Germany.
Although this decision meant insolvency for the network operatorglas fiber direct, it did not mean the end of it. You want to find new donors. “We have created the freedom to continue our expansion projects with another investor and let them grow,” explains a spokeswoman about the plans. However, the search should not be easy for the reasons mentioned above. The expansion boom of the past few years and the willingness of investors to put a lot of money into the projects has meanwhile declined noticeably.
Insolvency of fiber optic direct not an isolated case
However,glas fiber direct is not alone with its recently filed insolvency. Hellofiber is also facing difficult economic conditions and had to lay off some of its employees just before Christmas. The reason for the bankruptcy here is that the US parent company Liberty Global has said goodbye to fiber optic expansion in Germany. Instead, Liberty Global secured almost 4.92 percent of the Vodafone group.
Also read: Cable, DSL or fiber optics – find the right Internet connection
The Breko industry association views the two cases that have occurred in a short space of time with concern. According to Breko Managing Director Stephan Albers, the insolvency of fiber optic direct is not an indication of a slowdown in German fiber optic expansion. “However, the example underlines the importance of suitable framework conditions for investments in fiber optic expansion in order to avoid uncertainty in the market”. Areas in which industry and politics should urgently work together to create better conditions relate to the economically nonsensical double expansion of fiber optic networks, focusing public funding on areas that are really in need, and accelerating and digitizing the approval process.”