The Western Europe FTTH market is showing signs of a pick-up. While the existing footprint varies significantly across countries, both mature and under-developed markets have seen new initiatives announced in recent months. This suggests more activity may be ahead in the coming year.
France, Spain, Italy and Portugal have seen strong growth in the number of homes passed and subscribers in the past year, albeit growing from different bases. The French market may see a further acceleration after Altice agreed to sell a 49.99 percent stake in its SFR FTTH unit to a group of investors for EUR 1.8 billion. The company plans to roll out FTTH connections to 5 million French premises, with a minimum 1 million per year passed and a larger footprint added through acquisitions or franchising.
Italian national network
The Italian market has also picked up speed in the past year, after a long time lagging much of Europe in broadband speeds. Incumbent TIM is working on a plan to merge its FTTH activities with the wholesale operator Open Fiber and has already held talks with Open Fiber's shareholders CDP and Enel. The venture has the support of politicians and industry, which hope it can lead to a national fibre network and avoid duplication with regional initiatives. The state lender CDP may even take a controlling stake in the new company formed from Open Fiber and TIM's fixed network operating company.
In Spain, already a well-developed market, the operators continue to work on partnerships to extend their coverage. The latest cooperation announced is between Masmovil and Vodafone for access to fibre network infrastructure over four years. Vodafone gains access to 1 million Masmovil lines, and Masmovil can use 942,000 Vodafone connections. The deal covers dense areas such as Barcelona, Girona, Madrid, Malaga, Seville and Valencia.
Swiss setback
In Germany and Switzerland, the FTTH roll-out has been slower and more piecemeal, with many local and regional initiatives. Most recently it is the challengers on the market that have been looking to step up construction, while the incumbents are taking a more cautious approach.
SFN (Swiss Fiber Net) said recently it sees potential for a massive roll-out of FTTH across the country. Its members already pass around half a million homes and want incumbent Swisscom to cooperate more with the roll-out. However, a proposal to regulate wholesale access to Swisscom's network was rejected in the recent amendment of the Telecom Act in Switzerland.
In Germany, the operator BBV has attracted two new investors to support its network expansion. With its regional subsidiaries, BBV is building FTTH networks in a number of areas, in Baden-Wuerttemberg, Hesse, Thuringia and Rhineland-Palatinate. The biggest shareholder in the company is British investment group Riverrock.
New players in Benelux
Belgium also has a new player. While incumbent Proximus is starting with the FTTH roll-out in big cities and business areas, the new Flemish energy grid operator Fluvius is looking at its own residential FTTH trials. Fluvius announced initial projects in five cities, starting in 2019 with a budget of EUR 30 million. Both Proximus and Fluvius plan projects in the largest cities, Ghent and Antwerp.
The Netherlands is also seeing a revival, after incumbent KPN limited its FTTH expansion in recent years to new-build areas and focused on copper upgrades. KPN said recently it aims to add another 1 million homes passed by FTTH by 2021, and several local players are also developing their own fibre projects, including T-Mobile entering the market.
Fake fibre
The growing momentum has not escaped other players in the broadband market, such as cable companies. The FTTH Council Europe has called on regulators to take action and stop these providers from advertising their services as 'fibre' when they are not offering full fibre to the premises.
