At first glance, broadband expansion in Germany is booming like never before. In 2025 alone, according to figures from the industry association VATM, 5.4 million households were connected to the ultra-fast network of the future. The number of active connections increased by nearly a quarter, according to calculations by the consulting firm Dialog Consult.
Fiber optic expansion "toxic" for investors
Yet the industry is struggling. The company Deutsche Glasfaser, which is also active in North Rhine-Westphalia, recently halved its network expansion targets. "The topic of fiber optic expansion in Germany has become almost toxic for financiers," commented managing director Andreas Pfisterer on the decision. The Düsseldorf-based provider Metrofibre even had to file for self-administered insolvency last week. Here too, the company cited a "surprising withdrawal of financing partners" as the reason. The boom in expansion could therefore be followed by a severe downturn in many places. Not so in Cologne.
Claus van der Velden, commercial managing director at Netcologne, therefore does not want to speak of an industry crisis, but rather of a "new maturity phase" that the market has entered. The gold rush atmosphere that prevailed three or four years ago is over. "But Netcologne has shown that it is possible to make money with fiber optic connections even with high expansion activity," says van der Velden. Because the Cologne-based company has taken a rather conservative approach to expansion and has not brought in financial investors, it currently does not have to make any cuts to its expansion targets.
Reasons for the change in sentiment
Van der Velden only partly accepts the many reasons cited for the change in sentiment among investors. While construction costs have risen and civil engineers were hardly available for a time, "we have already passed the peak of this development." His company is now getting significantly better conditions again.
The reference to rising interest rates, which significantly increase the cost of long-term investments, also only partially explains the investors' withdrawal for him. Above all, some investors misjudged the market. "We aren't carrying water into the desert," says van der Velden, meaning that wherever his company lays fiber optic cables, there is no supply shortage, but rather a functioning copper cable supply that has long been in place. These cables don't reach their performance limits as quickly as was assumed a few years ago. With vectoring technology, better known as VDSL, and later so-called supervectoring, the existing infrastructure was able to be upgraded multiple times cost-effectively. While conventional DSL in other large EU countries only achieves bandwidths of 50 megabits, in Germany up to 250 megabits per second are possible based on this technology, VATM managing director Frederic Ufer recently explained at the industry meeting Anga Com in Cologne at the end of May.
"The pressure to switch to fiber optic is therefore much lower in Germany than in other countries where less has been invested in the copper network," says van der Velden.
More than 70 percent fiber optic in Cologne
The result can be seen in figures: Although about half of Germans could already access a fiber optic connection, only one in four uses the modern lines. In Cologne, the internet cable of the future is already in the ground for over 70 percent of households. However, the network is only used by 30 to 40 percent of citizens, van der Velden estimates. All others are apparently satisfied with their previous broadband provision. This despite the fact that fiber optic offers a more stable connection, lower latency, and higher bandwidths – at the same price as the phased-out DSL model, as Netcologne emphasizes. Because the amount of data the network has to handle increases by up to 30 percent year on year, the moment when the old lines reach their limits is foreseeable.
"But we cannot wait for that moment and then build the network overnight. The networks must already be in place when demand arises on a large scale," says van der Velden. When that will be, no one can reliably estimate. "Will we really network every refrigerator in the future? What latency do AI applications require?" The Netcologne managing director also does not dare to make a forecast.
Switch off the DSL network?
To initiate the necessary change, the industry is therefore pushing for the old copper network to be gradually switched off. Only then will fiber optic companies have planning security that customers will also jump onto their networks where they become active. Policymakers are working on corresponding regulations at several levels. The federal government could become active with a legislative amendment as early as this year, and the EU could follow with a uniform set of rules for the union in 2028.
Until the regulatory framework changes fundamentally, the industry relies on cooperation. Netcologne, for example, maintains partnerships with civil engineering specialists and in return brings its own strengths in network operation and marketing.
The "throwing in of the towel," as van der Velden puts it, meaning rapid expansion to claim areas for one's own company, will decline significantly, the Netcologne managing director believes. Instead, the industry is focusing on winning customers for its existing networks and expanding more selectively. And what about companies like the struggling competitor Metrofibre in Düsseldorf? Could Netcologne step in and take over the infrastructure there?
"That is not our strategy," says van der Velden. "We want to grow organically in our areas." However, he would not rule out such a step in general.
