Germany speeds up gigabit rollout while telecom sector warns of bottlenecks

Germany is rapidly expanding its fibre optic and mobile network rollout, according to the Federal Ministry for Digital and Transport on Thursday (14 December), but telecom operators are concerned about possible bottlenecks.

The digital ministry is confident it can reach the goal of nationwide access to the latest generation of fibre optics and mobile communications by 2030. In 2023, the government provided around €3.6 billion as part of the updated Gigabit funding scheme (Gigabitförderung 2.0).

“The federal government’s gigabit strategy is working. The current figures in the Gigabit Grundbuch testify to the high momentum of fibre optic and mobile expansion in Germany,” said Volker Wissing, federal minister for digital affairs and transport.

According to new data from the Bundesnetzagentur, the Federal Network Agency, almost three out of ten households already have a connection to the fibre optic network.

Regarding 5G, an increase of more than 17 percentage points within twelve months was recorded, with 89% of the company covered by July.

However, telecommunications associations ANGA, Bitkom, BREKO, BUGLAS, and VATM called on Tuesday for the gigabit funding for 2024-2026 to be reduced to €1 billion per year and the funds be used in a more targeted manner.

The reasons behind the call include limited construction capacity available, the prevention of a flood of applications, and frustration among local authorities.

“State gigabit funding in Germany must be thoroughly re-examined,” Sven Knapp, Managing Director of BREKO’s capital city office, told Euractiv.

Due to civil engineering and planning bottlenecks and the risk of funding measures crowding out private-sector projects, the associations estimate that completing new subsidised projects could take three to five years longer than private-sector expansion.

The associations argued that a limit of €1 billion per year would not hurt the roll-out of connections.

Backlash from the Bundestag

However, the criticism from industry associations does not seem to phase the government.

“The German government is providing a good and ambitious framework here,” commented Maximilian Funke-Kaiser, digital policy spokesperson for the FDP, to Euractiv.

The Greens also push to continue the current approach.

“Targeted use of funds instead of a watering can: That was the reason for the revision of the Gigabit Funding Directive, which has been in force since April 2023,” Paula Piechotta, A Green member of the Bundestag told Euractiv.

As part of Gigabit Funding 2.0, this year’s upper limits were set for each federal state. Nationwide, this cap totalled Bündnis90/Die Grünen €3 billion for 2023. The fact that there is a clear need for investment is shown, among other things, by the large number of funding applications, which totalled €6.8 billion.

As a result, many municipalities did not receive any grants as only €3.6 billion, or 436 of the 962 projects applied for, were approved.

The opposition, however, assumes an even higher figure in some cases.

“In my view, limiting the funds for this is, therefore, the completely wrong approach,” Christian democrat member of the Bundestag Reinhard Brandl pointed out to Euractiv.

The difficulty is that economically weak municipalities are subsidised, and economically strong municipalities are expanded by providers running their services. Municipalities with medium potential will probably have to wait in the end.

According to the Federal Digital Ministry (BMDV), around €3 billion will once again be made available for new projects in Gigabit Funding 2.0 in 2024.

“In the coming year, we will continue the close dialogue between the federal government, federal states, local authorities and the industry to achieve an even more targeted use of funds,” a spokesperson for the BMDV told Euractiv.

More selective approach

As a solution, the telecommunications associations ANGA, Bitkom, BREKO, BUGLAS, and VATM propose introducing a pre-qualification process to prevent a further overflow of applications.

“Clear criteria would give mayors and district councils clarity from the outset as to whether they have a realistic chance of success with a funding application,” the associations state.

[Edited by Luca Bertuzzi/Alice Taylor]

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