With the billion-dollar fiber optic expansion, Deutsche Telekom is gaining some ground in customer favor, but it remains an arduous undertaking for the group. As the group announced on Wednesday in Bonn, at the end of March it had around 2.2 million customers in Germany with a direct fiber optic connection, known as “Fiber to the Home” (FTTH). Around 0.2 million were added in the first quarter.
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Telekom’s fiber optic cables are in around 13 million households – either in the street in front of the front door or into the house. The uptake rate – i.e. the ratio of households with available fiber optics and households that also use this transmission technology and pay money for it – was 17.1 percent, 1.6 percentage points higher than a year ago. The value shows that there is room for improvement: five out of six households have not signed a contract, even though Telekom fiber optics are within reach.
Telekom is well ahead of its competitors
The competitors are also investing billions, but are nowhere near as advanced as the Bonn group. Vodafone and its fiber optic subsidiary OXG have 0.6 million fiber households in Germany. Vodafone does not publish how many of them have a contract. Competitor Deutsche Glasfaser has 2.8 million households, of which, according to the company, almost 30 percent also use FTTH and have a contract.
The take-up rates of German fiber optics and Telekom are only comparable to a limited extent, as German fiber optics is primarily expanding in rural areas and the interest in fast and stable Internet is higher there than in large cities, where there is a comparably fast alternative in the form of television cable Internet. In addition, in apartment buildings in cities there are sometimes problems with landlords who object to the laying of fiber optic cables from the basement up to the apartments.
Sales of fiber optic internet contracts are expected to pick up
Telekom CFO Christian Illek was confident that customer growth for fiber-optic Internet is picking up speed. 0.75 million new FTTH customers are expected to be added this year and one million in 2027. CEO Tim Höttges said they were not satisfied with the fiber optic utilization achieved so far. This is also due to the fact that Telekom does not get into all apartment buildings, for example because a landlord has a partnership with an Internet provider via television cable.
Telekom is now also expanding in rural areas or on the outskirts of town, where there are mainly single-family homes. The willingness to sign a fiber optic contract is higher there. “This expansion in rural areas is very, very expensive, but acceptance in these areas is much higher,” says Höttges. Homeowners also expect a fiber optic connection to increase the value of their property.
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Solid quarterly figures
On Wednesday, Deutsche Telekom also presented business figures for the first quarter, in which sales rose by 0.4 percent to 29.9 billion euros. If the US dollar had not been so weak, the increase would have been higher. The group profit was 2 billion euros. Due to restructuring expenses in the USA and other negative effects, this was a good quarter lower than the year before. The business figures were well received on the stock exchange; by midday the price of one share in the group had risen by two percent.
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