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Vodafone is pumping billions into fiber optic expansion
September 11, 2023, 5:20 a.m
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While Telekom was already investing heavily in fiber optic expansion, its competitor Vodafone relied on other technology. Now the group wants to follow suit – and lay fiber optics to up to seven million households. A financial investor should help.
Internet provider Vodafone has now stepped up its fiber optic expansion, lagging far behind its competitors. From now on, excavators are laying fiber optics in Neuss, North Rhine-Westphalia, in order to make “Fiber to the Home” (FTTH) available to a good 28,000 households and companies by 2024, Vodafone announced in Düsseldorf.
It is about the company OXG, which is owned by Vodafone and a Luxembourg financial holding. The new company, which currently has 100 employees and is expected to have 500 in the future, aims to install fiber optics to up to seven million households. Up to seven billion euros are available for the expansion.
Construction work is scheduled to start in Düsseldorf and Duisburg as well as in the Hessian cities of Marburg and Kassel in the coming weeks, and the excavators are expected to have dug in up to 150 cities and communities by the end of 2024. “This gives a strong boost to fiber optic expansion in this country,” said Vodafone Germany boss Philippe Rogge.
Vodafone Germany has so far only installed fiber optics into homes on a small scale; instead, the Düsseldorf company relied on television cables for Internet transmission. However, this technology is more susceptible to fluctuations than FTTH, i.e. fiber optics into the home.
Telekom is moving the fastest
FTTH is considered the best possible Internet, but is also more expensive for end consumers than television cable Internet (coaxial cable) or the very volatile and relatively slow transmissions over copper cable telephone lines (VDSL). Vodafone has come under pressure in recent years due to competitors’ fiber optic efforts. In order to manage the expensive expansion, Vodafone brought the Luxembourg financial holding company on board.
Alliances with financially strong partners from other industries are common: in 2021, Telefónica founded a joint venture with the insurance group Allianz to invest up to five billion euros in fiber optics within six years. The fastest mover is Deutsche Telekom, which has been relying heavily on fiber optics since 2020 and has already made FTTH available to 6.4 million households. That cost billions.
However, many residents still choose not to use high-speed internet due to the relatively expensive contracts. This is likely to change in the coming years as the Internet becomes more and more important in people’s everyday lives.