The 28th FRK Broadband Congress opened today in Leipzig with sharp warnings about fibre market realities and calls for stronger customer focus.
Ralf Berger (pictured above), new Chairman of German cable operator association FRK, welcomed delegates to two days of debate on the future of fibre rollout, customer demands and the role of medium-sized enterprises.
Berger, who succeeded long-standing Chairman Heinz-Peter Labonte, used his welcome speech to thank the board and his predecessor, before reminding delegates of the industry’s long development in supplying TV services to households, from DTT to DTH satellite and cable to today’s fibre networks. While technologies have changed, he said, the fundamental issues remain. Medium-sized companies played a crucial role in network rollout and in-house signal distribution decades ago, and continue to do so today.
But Berger was sharply critical of what he described as growing political interference in the broadband sector. “More than ever, politics is getting involved where it shouldn’t,” he said. The guiding principle, he stressed, must always be the benefit for the customer. If people recognise an immediate advantage, they will also be willing to pay for services.
The opening keynote came from Sebastian Krems (pictured), Managing Partner and CEO of Latus Consulting, under the title “From homes passed to homes connected – the new currency in the fibre market.” His analysis drew a sobering picture: rollout costs are higher than expected, many business plans are overstretched, and revenues remain too low. The average take-up rate, Krems noted, stagnates at around 25 per cent and is even trending downward. “Business plans are not flying,” he said bluntly.
This, he warned, makes it increasingly difficult to secure capital from investors. With end-customer prices in telecoms having hardly risen, investors now focus less on nationwide coverage and more on boosting returns. Consolidation is already underway. In this environment, Krems argued, opening networks through open access has become indispensable.
The rural market, heavily subsidised in recent years, is largely saturated. The key question, Krems asked, is whether the industry has really understood what customers want. The number one purchase criterion, according to surveys, is reliability – from installation to stable operation and adherence to promised data rates – cited by 40 per cent of potential customers. Price ranks second, download speed third. “But that is not what broadband providers usually advertise with,” Krems remarked.
According to his data, 27 per cent of households are ready to switch to fibre, while 34 per cent remain undecided. His advice: evaluate customer complaints on social media, where unmet promises are reflected most clearly. “We can do better,” Krems concluded, calling for operational excellence supported by robust IT, marketing and sales. That, he said, was essential not only in the retail market but also in wholesale, especially in open access scenarios. Only by tapping the large pool of unconnected homes can fibre business plans become sustainable.
Dr Henrik Bremer (pictured), lawyer at Hamburg-based firm Wirtschaftsrat Recht, offered in his speech a strategic outlook for cable operators. He confirmed open access as the right way forward, particularly as market consolidation accelerates among smaller fibre operators. Larger units, he said, would enable more standardisation and greater efficiency.
Yet Bremer also highlighted the resilience of cable networks, which today provide internet services at such high performance levels that fibre does not always deliver a compelling added value. “Who really needs one gigabit?” he asked, noting the lack of pressure from tenants and home buyers in a tight housing market.
Bremer joined Berger in criticising political and regulatory interventions, which he said add bureaucracy and slow down rollout. “Investors hate regulation and price caps,” he underlined. At the same time, he pointed to new revenue opportunities for companies operating at in-house network level (Netzebene 4), for instance through providing connectivity for smart meters, which are now mandatory in many cases and often located in basements with no Wi-Fi coverage.
The FRK Broadband Congress runs over two days, 10–11 September, combining expert presentations with networking opportunities, including the traditional industry evening on day one. Further sessions on the agenda cover topics such as market consolidation, technological innovation, wholesale strategies and legal frameworks.
