World Economy

Germany Needs Billions to Build High-Speed Internet

Germany Needs Billions to Build High-Speed Internet Germany Needs Billions to Build High-Speed Internet

By 2018, every German household is meant to get high-speed Internet, but the expansion work is lagging, putting German businesses at a disadvantage. Critics say the country needs billions in investment to catch up, DW reported.

Germany is lagging behind in building up its high-speed Internet network. Fiber-optic data highways – at least 20 times faster than a regular DSL connection – are barely available outside big cities. As hard as it might be to believe, Germany has the lowest fiber-optic coverage in all of Europe, with just 1 percent.

That’s a clear disadvantage for German businesses, especially as many companies are located in non-urban areas, which means they simply cannot use a lot of the latest technologies. If something isn’t done soon, Germany’s digital revolution will be on hold.

  Playing Catch-Up

The German government is now finally acting. The goal is to bring 50-megabit-per-second Internet to every single German household by 2018. The current average is 8.7 megabits per second.

To combat this, the Ministry of Transport and Digital Infrastructure has now started its new “network alliance for a digital Germany.” Its members include a number of trade federations and various telecom companies, who are expected to provide a large part of the investment. In 2015 alone, Internet operators like Deutsche Telekom, Vodafone or Telefonica are to invest some 8 billion euros ($8.5 billion) in expanding broadband infrastructure, and even small network operators like Inexio are pitching in.

Inexio is building in places where it is particularly expensive. Connections have to be laid anew, requiring expensive underground construction. With 5,000 kilometers of its own grid and 160 employees, the Saarland company is a relatively minor player, but the company has just succeeded in putting Saarbrucken airport on the fiber-optic grid with an investment of 2.5 million euros.


Meanwhile, Germany’s biggest Internet provider, Deutsche Telekom, has said it wants to reconnect 5.9 million households by 2018. But the company, formerly state-owned, has received criticism, because Telekom’s network is made up in large part of copper cables, much too slow for high-speed Internet purposes. The company’s plan is to revamp its 330,000 junction boxes with so-called “vectoring technology,” and so make the Internet connection up to four times faster.

The problem is these boxes are also being used by competitors who won’t have access to the new technology – a clear advantage for Telekom.

  Investments to Renew Grid

Vodafone, Germany’s second biggest telecom operator, also wants to invest heavily in the next two years – approximately 5 billion euros to renew the grid and provide faster Internet via mobile networks, cable, and DSL.

But the company apparently doesn’t think it can do all the work alone. That can only be done economically if the government invests too.

The German government has pledged to invest around 10 billion euros in broadband expansion. On top of that, they are hoping to add the proceeds from auctioning off digital frequencies. The auction will begin in early summer – frequencies that have previously been used by televisions with digital antennae can be sold off by the network operators and used for mobile broadband Internet. The government wants to invest what it makes from that into infrastructure – but no one knows exactly how much it will be.