Germany's fibre rollout has hit a tipping point

Since I came back from San Francisco, I’ve been watching infrastructure investment in Germany and Europe more closely again. And my impression is clear: we have hit a tipping point.

🧵 That’s exactly why Handelsblatt leads on the country’s fibre-optic rollout today.

During the years of low interest rates, an extraordinary number of operators piled into the market. Even thin returns were considered attractive – after all, a fibre network can be used for decades, perhaps even a century. Build it once, and you have relatively stable revenue for the long run.

📊 The industry is now estimated at around 280 operators. Some are excellent firms – but plenty have underestimated the business and overstretched themselves financially. Failed or struggling projects are not new.

⚠️ What is new: one of the flagship operators is now stumbling.

Deutsche Glasfaser has nearly halved its rollout targets. According to our reporting, it could stop building new networks entirely within two years. That’s a dramatic shift – building was its core competence.

Instead of laying new fibre, the company plans to focus on winning customers in areas where it has already built. That makes commercial sense – but it doesn’t replace the role Deutsche Glasfaser played in the rollout itself.

🔧 The only major operator still pushing the fibre rollout at scale is Deutsche Telekom.

With its “fibre factory” approach it has set industrial standards – credit goes in part to former German CEO Srini Gopalan, who is now applying similar ideas in the United States. That is the good news in the short term: without Deutsche Telekom, the country’s targets would slip even further.

❗ But this is also the network of the future. And precisely for that reason we need to be careful not to drift into new regional monopolies.

The full story by Jakob Blume – including analysis and commentary – is in today’s Handelsblatt edition.