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Fast Internet connections could become significantly more expensive

Prices for stationary Internet connections have been stable or even falling for years. But that could change. Inflation, a lack of expansion capacity, and rising wage and labor costs are pushing up costs. In the end, it will probably be the customers who have to pay.

Even in 2022, the expansion of fast Internet in Germany is still not satisfactory. In many places, there are still many households that have to make do with slow lines. Slow is defined as connections that offer less than 10 Mbit/s download. For this reason, the Federal Council has even enshrined the right to fast Internet in law. But this requires a good fiber optic network. However, expanding this network is expensive and time-consuming. And inflation is driving up the cost of fast Internet even further.

Higher operating and roll-out costs increase prices for high-speed Internet

The current situation on the market was just discussed at Fiberdays 22 of the German Broadband Communications Association. Several experts from the industry met here, including the heads of companies such as Deutsche Glasfaser, Infrafiber and DNS:NET. They agreed on two points. First, the cost of fast Internet is likely to rise in the coming months. Second, the price increase will be difficult to implement.

“We have not managed to implement price increases so far, not even an adjustment for inflation,” said Thorsten Dirks, head of Deutsche Glasfaser. He is therefore not very optimistic about the costs that will probably have to be passed on to customers. Nevertheless, the price increase is an evil that cannot be avoided in the long term. From the increased costs of expansion and general inflation to the increased energy prices that affect data center operations, for example, costs are generally getting more and more expensive. “At some point, we’re going to start passing on to customers,” says Stefan Holighaus of DNS:NET.

Someone has to make the start

Companies are forced to perform a balancing act, so to speak. On the one hand, they have to absorb the increased costs for fast Internet in the long term, i.e., pass them on to customers. On the other hand, they want to avoid scaring them off. In general, customers are currently rather reluctant to sign new fiber-optic contracts. With monthly costs of 79 to 90 euros for 1 Gbit/s, they tend to be on a high level compared with the average 30 to 40 euros for cable and DSL.

So it would be difficult to charge even more. Someone would have to dare to take the first step and raise the cost of fast Internet. “Three months later, everyone would join in,” Holighaus believes. Soeren Wendler, sales manager at Deutsche Giganetz, has a similar opinion. “The big players have to start,” he addresses Deutsche Telekom, Vodafone and Telef√≥nica.

In Germany, Internet rollout started too late

The higher costs for personnel and labor are also putting pressure on the expansion of high-speed Internet. This is urgently needed in Germany to give customers the opportunity to book high-speed Internet connections via fiber optics. As Statista writes, the proportion of stationary broadband connections in Germany that are implemented via fiber optics was just 6.4 percent in June 2021. This is because, compared with other countries, expansion in this country started far too late. In other countries, such as Spain, France and the Netherlands, the roll-out began as early as 2008.

Sources

  • heise
  • Statista

Topics

  • Internet

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