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German government plots €100bn digital infra investment

The plan running up to 2025 involves joint cash injections from both the government and the private sector’s network operators.

The German government said it is planning a “massive expansion” of its broadband networks as it revealed plans to spearhead a €100 billion investment in its digital infrastructure.

As per EU-directed targets, the investment is intended to facilitate the creation of a “gigabit society” where the entire country would have access to internet speeds of 1 gigabit per second by 2025.

The government laid out a four-step plan with interim targets of speeds of 50 megabits per second nationwide by the end of next year, with 75.5 percent of German households covered so far. It also wants the preparations for a comprehensive rollout of 5G by the end of 2020.

“New applications like Virtual Reality and the networking of all things bring enormous data growth,” Germany’s Federal Minister of Transport and Digital Infrastructure (BMVI) Alexander Dobrindt explained. “In the future, we need more bandwidth, reliable real-time transmission, and intelligent networks that process data independently, prioritise it and transport it to the user as quickly as possible.

“To this end, we are now building next-generation broadband networks, bringing together the most advanced technologies, such as [glass] fibre and the future 5G mobile communications standard.”

Dobrindt added that the BMVI envisages from 2018 its investment in digital infrastructure to cover about 10 percent of the government’s net expenditure. It will be joined in its spend by the Net Alliance Digital Germany, a group of German network operators including Deutsche Telekom AG, Vodafone and Telefónica. The BMVI’s strategy also includes plans to mobilise additional private capital in the sector and calls for a conference to be arranged to provide institutional investors with increased opportunities.

The investment strategy outlined by the German government builds on pledges it made towards the digital infrastructure sector in its budget in November when it unveiled “the largest investment budget for infrastructure that has ever existed”, Dobrindt said at the time. However, details on the €50 billion budget was more short-term and focused on transport investments.

Germany’s pledge came in the same week that the UK government declared its ambition to become a “world leader” in 5G technology, accompanied by some £1 billion ($1.2 billion; €1.1 billion) expenditure on digital infrastructure, although the vast majority is expected to come from the private sector.