The demand for fibre connections has two dimensions: Firstly, the FTTB/H rollout business model requires sufficient take-up rates so that the investments can be amortized. Otherwise, there is a risk that expanding companies will have to withdraw from the market. However, there is also a macroeconomic interest in the penetration and use of particularly high-performance FTTB/H connections. This is a prerequisite for actually realizing the potential of digitalization associated with these network infrastructures.
This discussion paper presents the factors influencing the demand for FTTB/H connections and their characteristics in Germany. The first part presents the demand for fibre connections in an international comparison and its influencing factors on the basis of statistical indicators. The analysis shows that the (relatively low) take-up in Germany is at a similar level to that in other countries where the expansion of FTTB/H has only picked up speed in recent years. It is striking that in countries with a high market penetration of fibre connections, a significantly lower price spread can often be observed between products with low and very high bandwidths, both at wholesale and retail level.
A detailed analysis of the situation in Germany shows that the current initial marketing and sale of FTTB/H connections is particularly challenging. On the one hand, this is very labour-intensive (and therefore expensive), and on the other, FTTB/H is now increasingly being rolled out in areas where VDSL vectoring and DOCSIS 3.1 are available as competing infrastructures. The challenge in this competitive environment is that many fixed broadband customers have little affinity for switching and also have little or no additional willingness to pay for fibre-based Internet.
