Parts of the observed effects can be explained by the aggregated publication of the figures for FTTB and FTTH, the increase of the gap is a provider-wide trend, however. There are various reasons:
- Demand for FTTH is relatively low in Germany to date, and customers' willingness to migrate is often reserved.
- Many companies deploying fibre optic networks focus on demand-driven expansion strategies, particularly for single-family homes, and are reluctant to connect homes without existing contracts for broadband connections. On the other hand, house owners are generally not keen on paying for unused broadband connections.
- In the case of multi-dwelling units, a relevant share of the companies deploying fibre optic networks is interested in the most extensive expansion possible, but faces various practical obstacles and challenges during the roll-out process.
- Other factors include the low level of wholesale competition for FTTH, operational challenges in the practical implementation of post-densification and the strategic behaviour of individual market players aiming to strengthen their positioning against their competitors.
We estimate the additional costs for the connection of every 1% of dwelling units in the course of a post-densification compared to the initial expansion in a range between €69 and €108 million. This amounts in light of the current relation between Homes Connected and Homes Passed to a total of €4.1 to €6.4 billion for a nationwide fibre optics deployment.
Against this backdrop, it seems necessary to identify and implement measures to reduce the gap. Recommendations for this are outlined in the discussion paper.
