The FTTH Council Europe’s Investors Committee has launched two significant reports: the Investment Tracker - October 2024 Update and the FTTH Investments in Europe - Market Sentiment Survey - October 2024 Update. Both reports provide a comprehensive overview of fibre-to-the-home (FTTH) investment dynamics across Europe, offering insights into current market conditions, trends, and key metrics in fibre infrastructure.
Stability in FTTH Investment Sentiment
The Market Sentiment Survey reveals that stakeholders across the European FTTH ecosystem are maintaining a stable outlook on investment levels in fibre infrastructure. Over the next six months, almost 35% of surveyed stakeholders anticipate no changes in the fibre investments landscape, while projections over the three-year period suggest a clear uplift in overall investment levels, with 34% of respondents expecting a slight growth, 25% anticipating a moderate growth, and 9% foreseeing a strong growth. Despite a challenging economic environment, these numbers highlight a steady commitment to advancing Europe’s fibre networks.
Thomas Miller, Chair of the Investors Committee, shared his views on the landscape for private investment in FTTH, noting both positive trends and challenges facing the industry: “As always, there are positive and challenging developments. We are seeing success stories on the market and some successful companies with a good track record. Successful business models are also crystallizing. New technological opportunities continue to drive expansion. There is no doubt that the general conditions are still in favour of the 100 percent expansion of fibre optics in Europe".
FTTH Investment Levels: Slower Growth, Key Insights
According to the Investment Tracker, the total value of FTTH/B transactions in Europe reached €12,126 milion so far in 2024 (-24% vs 2023), reflecting a more tempered growth trajectory. This is a notable decline compared to the surge of new investments seen in 2022 (€27,252 milion) and the slight dip experienced in 2023 (€15,892 milion). The report highlights a recalibration phase in financing, refinancing, and greenfield FTTH/B projects, with stakeholders adapting to changing market and economic conditions.
Miller elaborates on this cautious stance among investors: “A high proportion of users still do not want to switch or are satisfied with their current coax or copper connection. Not least because of this, many business cases have turned out to be too positive, and investors are correspondingly cautious and much more demanding in terms of their requirements. In addition, FTTH as an asset class is currently facing a lot of competition from other digital infrastructure, e.g., data centres. The economic and geopolitical environment remains uncertain, which means that business cases are more ‘stressed”.
Building Investor Confidence
For fibre infrastructure to attract greater private investment, Miller emphasizes the importance of a strong track record and proven business models.
“Investors demand a good track record. This goes hand in hand with a proven and successful business model. Investors will try to position themselves in such a way that their investments participate in the great opportunities of the market in the medium term: successful acquisitions and the gradual shutdown of copper networks and thus a significant increase in take-up rates”, Miller explains.
Looking Ahead: A Favourable Regulatory Framework for Copper Switch-Off
The reports underscore a cautious but optimistic outlook among FTTH stakeholders and investors. While the reported volume and value of financing and refinancing transactions remain modest compared to past years, the market retains significant long-term potential. With the right conditions and a focus on delivering measurable outcomes, Europe is well-positioned to continue advancing its digital infrastructure and supporting the rollout of next-generation networks. It is essential to maintain a favourable regulatory framework for fibre investment in a competitive environment. The stability of the regulatory framework provides a secure and predictable environment, encouraging private investors to contribute to the expansion of FTTH networks. The strong political focus on copper switch-off will serve as a further catalyst, driving the adoption of FTTH networks and encouraging broader coverage. Additionally, FTTH as a green asset offers significant environmental benefits through reduced energy consumption and improved efficiency compared to legacy copper networks.
Why Join the FTTH Council Europe?
Membership in the FTTH Council Europe comes with the privilege of accessing exclusive content like the detailed white paper we discussed in this article. Members enjoy numerous resources, networking opportunities, and insights into FTTH technology advancements.