If you are new to Germany, you may find the following combination of concurrent aspects perplexing: Europe’s industrial hub and one of the centers of global innovation has surprisingly slow internet. By slow we mean below the average speed for the Organisation for Economic Co-operation and Development (OECD) member countries and lagging behind less developed and wealthy countries both in terms of mobile and broadband speeds.
If you are used to the internet speeds in Northern Europe, East Asia, or—perhaps unexpectedly for those unfamiliar with this region—Eastern Europe, the German internet may come as an unpleasant surprise. Determined to get to the bottom of this conundrum, we have devoted this week’s post to exploring the reasons behind this apparent incongruity.
A thorny issue
The German IT sector has long complained that the slow internet is hampering the development of high tech in Germany, particularly of data-intensive disciplines like artificial intelligence, robotics, and artificial reality. But the issue of slow internet speeds is a thorny and multi-pronged one, featuring factors like politics, (partly) state-owned enterprises, and chronic underinvestment in infrastructure, amongst others.
The topic of laying out a fiber optic network all over the country has been the subject of political ping-pong at the federal and local levels for many years. The impediments to its implementation, unsurprisingly enough, are financial constraints and political disagreements. By some estimates, such an endeavor would come at a price of €80bn, almost three times more than what the government is prepared to invest in infrastructure overall. Not only that, but incumbent Deutsche Telekom, a third of the shares of which are owned by the federal government, has been staunchly opposed to the idea of laying out fiber optic cables all over the country, particularly in underpopulated rural areas. While its position may make financial sense, it is politically unpopular, for it leaves those places with the most constrained resources—underpopulated towns and regions—to fend for themselves in order to have functional internet.
Instead of fiber optic, the company has used a technique called vectoring, which can increase speeds on the existing copper lines at a fraction of the cost of fiber optic, though it is likely to be a temporary fix that will soon be rendered obsolete by technological developments.
Having ruffled feathers in Berlin, Brussels, and the German countryside for quite some time, Deutsche Telekom has promised to streamline the vectoring process in more areas shortly.
But the telecommunications incumbent is not the only culprit for Germany’s slow internet. The funding that the federal government has made available for the development of internet infrastructure—€3.5bn for the period 2015-2021—requires such a complicated application process, that it dissuades smaller states and municipalities, which have limited human resources, from applying for grants for these purposes. This hurdle, too, is likely to be overcome soon, though, as the governing coalition promised in early 2018 to make it easier for local government institutions to apply for the funds.
Keeping our hopes up
Many promises are being made about improving the quality of the internet in Germany. We at AtomLeap—and likely many companies that, like us, rely on high-speed internet—are choosing to remain hopeful that the situation will indeed improve sooner rather than later. In the meantime, like any shortcoming, the slow internet in Germany is pushing high-tech startups to be creative and to do more with less.