Fibre broadband’s capacity to transmit information at 2/3 the speed of light means it offers almost unlimited bandwidth and extremely low signal attenuation. As a result, governments worldwide have implemented initiatives to expand their fibre networks and boost internet provision – producing significant opportunities for fibrecos.
For example, in the US, $42.5bn was allocated to its Broadband Equity, Access, and Deployment (BEAD) initiative, targeting regions with sub-100 Mbps speeds. Meanwhile, since 2011 India’s BharatNet project has delivered affordable, high-speed internet to over 214,000 Indian villages through fibre broadband. And in Germany, its Gigbitstrategie programme aims to deploy fibre broadband to all areas of the country by 2030.
However, according to Omidia, high deployment costs and logistical hurdles are preventing the Gigbitstrategie from reaching its targets. In India, telecos such as Bharti Airtel and Reliance Jio have continued to focus on the mobile segment, discouraged by unclear right-of-way policies, high costs, and lengthy bureaucratic processes.
Yet the demand for reliable, high-speed internet access continues to grow. Bearing in mind these challenges, fibreco CFOs need to make use of every available tool in their business management arsenal to achieve effective growth and optimise budgets.
Brightspeed, one of the largest fiber providers in the US, offers a case in point. To support rapid network expansion while keeping costs under control, the company turned to SAP. This helped Brightspeed standardize operations from day one, gain real-time visibility into payments and revenue recognition, and scale smarter. As more fibrecos shift from traditional telco models to tech-powered operations, digital transformation is proving essential to long-term competitiveness.
Challenging regulatory and economic environment in telecoms
Despite ambitious government targets for fibre network expansion, fibrecos continue to face significant challenges in achieving growth. Notably, fibre broadband can require disruption to local communities in the form of groundworks. The bureaucratic processes and permissions needed to undertake these works can be lengthy, ultimately damaging fibrecos’ financial health as deadlines protract. Creating the expensive physical fibre network in countries such as the UK, where there is no pre-existing infrastructure, compounds this issue, necessitating careful financial planning.
Moreover, a fragmentary regulatory landscape that varies from region to region negatively influences market consolidation and infrastructure investment strategies. Although the EU’s Electronic Communications Code (ECC) tries to standardise regulations across member states nevertheless differences remain between countries. For example, Italy favours a model where a few large companies act as universal fibre carriers, while Germany’s wholesale access mandate strategy has impeded fibre rollout. Diligent financial planning is needed to optimise investments and infrastructure development within these complicated frameworks.
A careful CFO can plan as much as they want, but finding the capital to fund fibre expansion remains one of the biggest challenges faced by fibrecos, who frequently rely on debt to fund projects. The spike in global interest rates has worsened the situation, reducing profitability and increasing pressure on cash flows. Such high interest rates can also impact investment and M&A opportunities. On top of this, global inflation has reduced consumer spending power, potentially reducing demand for fibreco services as customers seek cheaper alternatives. Fibrecos need to pay close attention to their resources and consider how best to optimise their output if they are to stay abreast in this challenging financial ecosystem.
A digital business suite for fibrecos
Grants, tax breaks, and other government incentives can support fibre expansion, while joint ventures can also help to pool resources and mitigate risk. Business management tools are also proving essential, offering tailored insights to support sustainable growth.
With over 50 years of industry-proven experience, SAP Business Suite unites mission-critical applications, real-time contextual data, and embedded artificial intelligence (AI) into one integrated system. Designed to help fibrecos and other telecoms businesses scale more effectively, the platform extends across the complete telecoms value chain, helping drive great efficiency. Existing SAP customers already generate 84% of global telecoms revenue, highlighting its status as a trusted and effective platform.
In a challenging economic environment, SAP gives fibrecos the tools they need to achieve resilient profits. This modern, cloud-based platform helps fibrecos adapt with confidence even as regulations evolve. Supported by intelligent AI agents, SAP Business Suite can optimise spending, workforce management, and supply chains, helping fibrecos become proactive rather than reactive when the business ecosystem shifts.
While bureaucratic challenges and economic fluctuations present challenges for the expanding fibreco, SAP’s cutting-edge automation and cloud-based applications can help telecoms businesses become more efficient and effective across their complete value chain. To learn more, download the free whitepaper below.
