Basically three generic options for achieving critical mass can be distinguished: (1) organic growth, (2) inorganic growth through company acquisitions (consolidation) and (3) cooperation. All three options entail different company-specific opportunities and challenges as well as competition policy implications.
Over the last three years takeovers of fibre companies have only taken place to a limited extent in Germany. The reasons for this include a lack of investment funds, poor quality and/or documentation of the infrastructures on offer, and very different price expectations between potential buyers and sellers. Instead, there is an increasing trend towards cooperation on the German market with the aim of achieving economies of scale. The most prominent example of this is the cooperation in the form of the ‘Fibre Platform’ model of Telekom Deutschland GmbH (TDG). Comparable cooperation models between competitors are not (yet) widespread in the market. Cooperations such as the BREKO purchasing association or the Carrierverbund aim to achieve economies of scale in sub-areas of value creation through closer cooperation, but do not (yet) cover complete parts of the value chain. NordConnect, a joint company in which participations are held by several municipal utilities engaged in FTTB/H rollout with a regional focus in Schleswig-Holstein, is scheduled to launch in early 2026.
In view of the difficult overall economic situation in Germany and the industry-specific challenges many fibre companies are confronted with, a major wave of takeovers is not to be expected in the short to medium term. Instead a continuously rising number of cooperations between alternative competitors with or without the involvement of TDG seems more likely. They are easier to achieve than company takeovers and offer the opportunity to realise efficiency gains in the short term. At the same time, however, an increase in insolvencies cannot be ruled out.
