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Fibre broadband development in Europe
What is the European Commission's Gigabit vision?
The European Commission's Gigabit vision for 2025 can be broken down into 3 main objectives,
- Gigabit connectivity for all of the main socio-economic drivers;
- Uninterrupted 5G coverage for all urban areas and major terrestrial transport paths;
- Access to connectivity offering at least 100 Mbps for all European households.
The acceleration of Fibre broadband development in Europe
The COVID-19 pandemic highlighted the importance of broadband coverage as more social and economic activities moved online. A stable and strong broadband network was necessary to keep businesses and citizens going about their daily activities. According to a McKinsey Global Institute survey of executives, the COVID-19 crisis has also accelerated the digitization of customer and supply chain interactions and of internal operations by three to four years.[1]
What is the current situation of Fibre broadband development in Europe?
Since 2015, the number of households with access to full-fibre internet has increased from a mere 20% to 52% in 2021.[2] More work still needs to be done to increase the fibre development within Europe however the current efforts within the region are encouraging.
What are the projections for Fibre Installs in 2022?
By the end of 2022, it is projected that 60% of European households will have access to full-fibre internet. The increased coverage is a result of the cooperation between the private and public sector.
The Connecting Europe Broadband Fund (CEBF) is a funding initiative that is setup to aid the financing of the Gigabit objectives. Since its establishment in 2007, the fund has raised an aggregate of €3.7 billion. It is through this funding that rural areas in the EU are receiving the necessary development for broadband coverage. For example, in 2021 the CEBF invested €40 million in a fiber-to-the-home (FTTH) project operated by ASTEO Red Neutra, a new wholesale FTTH operator in Spain. 500 towns and villages are projected to be able to benefit from this initiative.
What to expect in the next few years?
Based on an analysis of 12 recovery plans submitted by European Union member states, Deloitte concluded that based on the current funding initiatives, the region is at risk of not achieving its digital goals. [1]After reviewing the 12 recovery plans submitted, only 45% of the necessary investment to achieve the high speed connectivity target set forth in the Gigabit will be provided. One of the reasons could be the regulatory issues within most European Union member states that will prevent private firms from investing in the digital network growth. The previous Europe 2020 strategy[2] had aimed to bring broadband to all Europeans and this has since then been rebranded as objectives for the Gigabit vision. The previous strategy was impeded by the lack of incentive for private firms to invest in the rural network. Therefore it is crucial for the European Commission and local governments to be able to address this gap and have the private sector invest and participate in the development. There is still hope for the region to achieve the objectives set. One fifth of the €723.8bn EU Recovery and Resilience Facility (RRF) is set aside for improvements to digital capabilities, with a focus on fibre deployment. The additional funding will be distributed based on the country’s GDP loss due to the pandemic. Whilst the effects of the funding can yet to be fully measured, it is certainly encouraging and helping to move the region one step closer to the objectives set.