Market Trends of Germany Telecom Towers Industry
5G Deployment Acts as a Major Catalyst for Growth in the Cell-tower Leasing Environment
- In the German telecom towers market, the surge in 5G deployments is significantly driving growth in the cell-tower leasing industry. 5G technology's rollout demands a denser network of cell sites than its predecessor, 4G, owing to the former’s higher frequency bands, which cover shorter distances and face easier obstructions. This factor drives a significant need for bolstering infrastructure, necessitating the construction of new towers and upgrades to the existing ones.
- In response to these demands, mobile network operators (MNOs) are increasingly opting for leasing agreements with independent tower companies instead of constructing and overseeing new sites. Through leasing, MNOs can rapidly broaden their 5G networks without incurring hefty initial expenses. Simultaneously, tower companies benefit from increased occupancy rates and extended contracts. This mutually beneficial management is fueling the growth of the cell-tower leasing environment.
- With the ongoing deployment of 5G, MNOs are also actively upgrading their existing sites with 5G-compatible equipment, thus intensifying the demand for leased tower space. To achieve widespread 5G coverage, especially in urban and suburban locales, the German telecom towers market is increasingly leaning on leasing, underscoring the importance of existing and new towers.
- In June 2024, Ericsson and Telefónica Germany signed an agreement to extend their core network partnership. Ericsson's dual-mode 5G Core and cloud infrastructure solutions currently deliver mobile connectivity to 45 million O2 Telefónica subscribers, encompassing 5G Standalone (SA), 5G Non-Standalone (NSA), 4G, and even 2G services. The agreement enables the two companies to enhance innovation and functionality in the core network, gearing up for future demand.
- In July 2024, O2 Telefonica, a German telecom operator under the ownership of Spanish telco Telefónica, signed a cooperation agreement with local highway operator Autobahn GmbH. The collaboration aims to enhance the 13,200-kilometer-long highway network by expanding mobile phone sites equipped with 5G technology.
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The Rooftop Segment is Expected to Witness Significant Growth Opportunities
- In Germany, the telecom towers market is experiencing significant growth, largely fueled by the rising demand for rooftop installations. With challenges such as land constraints and community pushback against new ground-based tower constructions, rooftop installations have emerged as a compelling alternative. These installations allow mobile network operators (MNOs) to boost network coverage and capacity, sidestepping the lengthy approval processes of constructing new towers.
- Strategically positioned in urban locales, rooftop sites enable MNOs to meet the surging demand for high-speed data and enhance connectivity, especially in densely populated regions. This factor is becoming increasingly vital as Germany accelerates its 5G deployment, necessitating a more concentrated network of sites to guarantee optimal coverage and performance. According to the Federal Network Agency, in June 2023, approximately 95.91% of households in Germany enjoyed access to high-speed broadband internet.
- Communities and local governments find rooftop installations less intrusive and, therefore, more acceptable. For MNOs, these installations present a cost-effective solution by leveraging existing structures, cutting capital expenditure, and accelerating the timeline to activate sites.
- The rising demand for rooftop installations is bolstering the telecom towers market in Germany. These installations offer a viable and scalable solution, effectively addressing the regulatory, environmental, and community challenges linked to conventional tower construction.
- In July 2024, Vodafone Germany, in collaboration with Ericsson, rolled out its inaugural compact 5G antenna atop a parking garage in Düsseldorf. Vodafone aims to deploy an additional 500 sites by the end of next year. This expansion, especially on rooftops, may enhance Vodafone's 5G mobile network coverage throughout Germany.
