Vodafone Germany plans €2bn Gigabit fibre investment

Vodafone Germany has unveiled plans to invest €2 billion by the end of 2021 on Gigabit fibre broadband services.

The UK-headquartered telecoms giant said it expects todeliver around 13.7 million new gigabit connections to German consumers andenterprises under the plan.

Vodafone Germany CEO, Hannes Ametsreiter, described the investment strategy as “transformational” and predicted it would deliver “incremental revenue growth and attractive returns for Vodafone’s shareholders.”

“The project is consistent with our strategic goal to become a leading converged communications operator in Germany, enabled by a best-in-class Gigabit network infrastructure,” he said.

Vodafone said that today 25% of German broadband connections are still below 50Mbps and only 2% are at Gigabit speeds, and claimed the investment will allow local enterprises and communities to move away from copper-based internet services.

At €1.4 – €1.6 billion, the bulk of the investment is targeted at Vodafone’s ‘Giga-Business’ initiative, with a target of reaching 100,000 companies in some 2,000 business parks by the end of calendar 2021.

This builds on Vodafone’s July 2017-announced partnership with fibre-to-the-premises provider Deutsche Glasfaser to reach 19 of Düsseldorf’s industrial and commercial business parks by early 2018.

Roughly €0.2 – €0.4 billion of the investment will be allocated to Vodafone’s ‘Giga-Municipality’ scheme, with a goal of offering gigabit services to roughly one million consumer households in rural areas, in co-operation with local municipalities, by the end of 2021.

The remaining €0.2 billion of investment will be spent on enhancing Vodafone’s entire cable footprint from the current top speed of 500 Mbps to 1 gigabit per second, through the accelerated adoption of DOCSIS 3.1 technology. This initiative is dubbed ‘Giga-Cable’.

Vodafone said it expects its overall investment to drive an uplift of one to two percentage points in Vodafone Germany’s service revenue growth rate, compared to its prior expectations, starting from full year 2019/20.