Vodafone is set to splash around €2 billion on rolling out FTTH and accelerating the speed at which it is upgrading its cable network in Germany.
A new four-year investment plan aims to deliver 13.7 million new gigabit connections to German consumers and businesses.
Vodafone’s next-generation network in Germany, which includes fibre or cable connections providing speeds of over 30MBps, reached 12.6 million households as of March.
The operator has 6.36 million broadband customers currently, after adding 100,000 subscribers in the year to June.
The plan comprises three initiatives: providing FTTH to business parks and rural areas, and upgrading Vodafone’s existing cable footprint.
The first initiative, costing between €1.4 and €1.6 billion, will target 100,000 companies in around 2,000 business parks.
Vodafone said it would work both alone and with specialist partners to roll out pure fibre tech, although it said it hopes to take full ownership of all the passive infrastructure deployed in the longer term.
One of the partners it plans to work with is Deutsche Glasfaser, which signed a partnership with Vodafone in July to roll out fibre in 19 industrial and commercial business parks in the Düsseldorf area.
A minimum take-up of around 40 percent of businesses within each park will be required before the roll-out can proceed, the operator warned.
In rural areas, Vodafone will spend between €200 million and €400 million to connect around one million households to FTTH through partnerships with local government.
Local authorities will build and own the passive infrastructure while Vodafone will operate the network and build the backbone fibre connection.
This investment will proceed when around one third of homes in a municipality have committed to buy FTTH.
Finally, Vodafone will spend €200 million to accelerate its plans to roll out DOCSIS 3.1 to its existing cable footprint.
It will now deploy the technology within two years rather than four years, meaning customers in the largest German cities could get access from 2018.
Vodafone said it is hoping for a boost of between one and two percent to its service revenue growth rate in the 2019/2020 financial year, an estimated internal rate of return of over 20 percent and a payback period of four years per business park and six years per municipality.
Vodafone Germany saw service revenue grow 3.4 percent in the year to the end of June to reach €2.49 billion.
Hannes Ametsreiter, CEO of Vodafone Germany, said: “The project is consistent with our strategic goal to become a leading converged communications operator in Germany, enabled by a best-in-class Gigabit network infrastructure.
“I am confident that these largely success-based investments will deliver incremental revenue growth and attractive returns for Vodafone’s shareholders.”