The expansion of the fiber optic network is in full swing in Germany and is making good progress. According to a study by the industry association VATM, 32 million households and businesses should be supplied with cables for fast internet by the end of 2026. That would be an increase of 5.4 million within a year and therefore a record number. The nationwide fiber optic expansion is considered an important location factor for the digital economy. Nevertheless, the fiber optic industry is currently in crisis.
High construction costs and increased interest rates
VATM managing director Frederic Ufer speaks of a tense situation on the fiber optic market. The reasons for this are increased interest rates, high construction costs and low income.
Only about one in four households signs a contract for fiber optic internet.
Most households still use Internet via DSL with television cable Internet or telephone lines. These technologies are already considered outdated and are based on copper. Data transmission via fiber optics uses light signals and is faster.
In order to earn back the high expansion costs, income must be generated, which is currently difficult. Difficulties also exist due to regulatory uncertainties.
High costs for expansion
Fiber optic expansion is capital intensive because it involves permits, technology, sales, civil engineering and house connections. Many companies initially invest a lot of money and only make profits years later. This still worked well in the low interest rate phase of 2022. Now, however, loans have become more expensive and refinancing has become more difficult. Investments only pay off after ten to 20 years.
Civil engineering costs, which include costs for materials and machines, are high in Germany.
In an international comparison, Germany has the highest expansion costs.
Lack of skilled workers
The shortage of skilled workers in the construction industry is another problem. Network planners, civil engineers and fiber optic fitters are particularly needed. No reliable information could be found on the exact development of the need for skilled workers in the management of earthmoving work in 2025 compared to the previous year (in the original text: “38 percent increase”); the number therefore remains unclear. A possible reason for the general shortage of skilled workers is various other infrastructure projects that are ongoing in Germany at the same time, such as the renewal of bridges or highways.
Bankruptcy proceedings at some fiber optic companies
Some fiber optic companies are in crisis, including the North Rhine-Westphalian conglomerate Ruhrfibre and Metrofibre, which is going through preliminary insolvency proceedings under self-administration. The financial partners had withdrawn their commitments.
The conglomerate is now looking for new investors. Fiber optics from Ruhrfibre are within reach of 100,000 households in Essen. The plan is to supply 137,000 households. The expansion is now paused. The company also has ambitious goals in Mönchengladbach, Düsseldorf, Bottrop and Herne, but it remains to be seen whether it can achieve them.
Other companies are not yet in bankruptcy proceedings, but they urgently need fresh capital. This also applies to the Düsseldorf company Deutsche Glasfaser. The company was able to collect 1.2 billion euros.
The Hamburg company Deutsche Giganetz, which was able to secure financing of 0.3 billion euros in 2025, was also under pressure. The Kiel company GVG Glasfaser also announced extra financing of 0.135 billion euros in February 2026 – other providers were less successful and disappeared from the market.
Andreas Pfisterer, the head of the German fiber optic company, announced at the Anga Com internet trade fair that the expansion targets would be lowered because the search for fresh capital is difficult.
Subdued demand for fiber optic contracts
The price of fiber optic internet has now fallen, but demand is subdued. Of the consumers where fiber is available, three quarters do not sign a contract because the landlord does not agree due to the in-house cabling required, or they are not interested themselves.
Many potential customers do not respond to advertising letters. The industry therefore relies on door-to-door representatives. Some of these representatives appear penetrating. This leads to complaints to consumer advice centers.
There are around 300 fiber optic companies in Germany.
About two-thirds of them serve fewer than 10,000 households. According to VATM managing director Ufer, Telekom is exploiting its dominant market position and causing problems for smaller companies – Telekom rejects this and points to its billions in investments in fiber optic expansion.
Of the households and businesses with fiber optics within reach, almost half sign contracts with Telekom. According to the forecast, that will be around 15.1 million at the end of 2025. Arch-rival Vodafone, on the other hand, only has fiber optic coverage in reach of 0.6 million households, which are served via its subsidiary OXG.
Telekom and Vodafone are investing in fiber optics and also maintaining their old portfolio. Telekom still has telephone lines with DSL in 21.8 million households. Vodafone’s legacy assets are television cables that are used by 8.5 million customers.
Customers are still using these old technologies even though they could have a fiber optic contract for about the same price or a small premium.
Copper networks as a problem in fiber optic expansion
As VATM managing director Frederic Ufer says, the quality of DSL is still satisfactory for many people in Germany. In other large EU countries only bandwidths of 50 megabits can be achieved. In Germany, however, up to 250 megabits per second are achieved. With coax technology, which is used for television cable Internet, transmission speeds of up to 1,000 megabits are possible.
DSL is still widespread and is slowing down the fiber optic market. Ufer is hoping for an amendment to the law to put pressure on Telekom to gradually switch off its DSL. Telekom hopes that its customers will switch to fiber optics – but it wants them to choose Telekom’s own fiber optic network and not that of a competitor. However, she doesn’t want to force her customers to change because they might react offended.
The German amendment is due to come in 2026. The pressure could be increased in 2028 by an extensive EU regulatory network.
Frederic Ufer is confident that demand for fiber optics will increase. Fiber optic offers the best possible transmission. The volume of data to be transferred is becoming ever larger due to increasing digitalization in Germany. One reason for this is the increasing use of artificial intelligence.
