If a fiber optic network is built in a place, it does not automatically mean that the fiber optics will be laid into the houses. It could even be the case that it doesn’t even reach the building. By 2030, every house should have a fiber optic connection. That’s what the government wants. However, there are currently significant gaps that need to be closed.
At the end of August 2023, the Federal Association of Broadband Communications (BREKO) presented its annual market analysis. The central statement: Just over a third of German households, including companies and authorities, have access to a fiber optic network (35.6 percent). A year ago it was just over a quarter. The fiber optic expansion is making progress.
But: BREKO also counts the so-called “homes passed”. This is the name given to households that have a fiber optic network running along them. This means that fiber optics still have to be laid in the last few meters up to the house wall. From time to time there is also talk of “Homes passed+”. There is no longer any need for civil engineering, all that is missing is the house stitch, i.e. the introduction of fiber optics into the building. Once the house has been completed, it is referred to as “homes connected”.
No nationwide fiber optics only with “Homes passed”
Even if the distance from the street or sidewalk under which the fiber optic runs to the house wall is only short, that doesn’t mean that the construction crew will ring the doorbell tomorrow if the homeowner orders a fiber optic connection today. It simply doesn’t make sense for companies to return for one or a few households. There are too few staff and construction costs are rising.
The federal government wants a “comprehensive energy and resource efficient supply of fiber optic connections into the home” for Germany by 2030. This is what it says in their gigabit strategy. As of June 2023, BREKO counts 17.3 million households with access to a fiber optic network. The Federal Network Agency (BNetzA) estimates 13.1 million at the end of 2022. This also includes the “Homes passed”.
BREKO includes 8.9 million households in the “Homes connected” category. The BNetzA has 6.4 million. Based on almost 41 million households in Germany, around 70 to 75 percent still need to have fiber optics installed to the building by the end of 2030 in order to achieve the political target.
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Germany needs more “Homes connected” and “Homes activated”
What has to happen in order not to tear down a specification for broadband expansion again? More “homes connected” are needed. Instead, it is primarily “homes passed” that are being built. If you take the figures from the BNetzA, the total number of “homes passed” has almost doubled within two years. In contrast, “connected homes” only grew by around 70 percent.
However, the “Homes connected” are the basis for the expanding telecommunications companies to be able to recoup their costs. This can only be achieved if as many households as possible use the fiber optic connection. Then we speak of “Homes activated”.
According to the BNetzA figures, fewer and fewer “homes passed” are becoming “homes activated”. While in 2020 almost one in three households became fiber optic customers, in 2022 it was only slightly more than one in four. In absolute numbers, there will of course be more households in 2022 than in 2020, but if the development in fiber optic expansion continues like this with too strong a focus on “homes passed”, companies will soon have to open up many gaps.
There is a risk of an expensive fiberglass patchwork
A fiberglass patchwork could be expensive. Either for companies that need to densify their fiber optic networks with smaller construction projects in times of rising costs. Or for the households who have to pay for the house connection in these densifications, which is often free when a new network is built.
Ultimately, it could also be expensive for taxpayers. Namely when the companies cannot close the gaps that have arisen on their own. Then the federal and state governments step into the picture and provide support with funding – which is nothing more than tax revenue.