GVG Glasfaser receives fresh capital for new FTTH networks

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The crisis in the German fiber optic industry has not spared GVG Glasfaser either. Around two years ago, the Kiel-based group had to lay off about a quarter of its workforce. High construction costs and increased loan interest rates strained GVG's financial cushion. Following a strategic realignment, the Kiel-based company is now delivering positive news.

Sum Exceeds Expectations

After GVG was able to complete several expansion projects and increase its customer base last year, the network operator is now receiving fresh capital for new projects. An international consortium consisting of Hamburg Commercial Bank (HCOB), KfW, Raiffeisenlandesbank Oberösterreich, and an unnamed institutional investor is investing 135 million euros in the group. The previous investor, Palladio Partners, remains the sole shareholder of the Kiel-based company.

The sum exceeds its own expectations, GVG announced. "Given the current situation in the financial markets, I see this as a great vote of confidence in our sustainably growing company," said GVG CEO Thorsten Fellmann, pleased about the fresh capital. "We have undergone a development that an increasing number of market participants are now facing challenges with."

Layoffs and Customer Dissatisfaction

The increased costs led not only to layoffs at GVG. In late summer 2024, ING, KfW, and Norddeutsche Landesbank Girozentrale helped GVG with a loan of 85 million euros, which could be increased by another 80 million euros.

Furthermore, there was criticism regarding GVG's construction quality and customer service. Significant delays occurred in expansion projects. Customers had to wait for months for their fiber optic connection after signing a contract and complained about the lack of communication from GVG. To remedy the situation, the Kiel-based company initially focused on completing ongoing expansion projects before starting new ones.

Difficult Market Environment

GVG is not an isolated case. A lack of capacity in trenching work has caused prices to skyrocket in recent years. This is causing network operators' cost calculations to falter. If a construction company even goes bankrupt, it becomes difficult to find a replacement that will work for the previously calculated prices, given the cost increases.

In addition, many fiber optic networks are not sufficiently utilized to offset rising costs through revenue. Many network operators have only laid fiber optic cables to the property line (Homes Passed). The last few meters to the house still need to be built in many places (Homes Connected) to reach customers (Homes Activated). Therefore, smaller fiber optic network operators with limited reach, in particular, are facing financial difficulties.

"Operationally Positive Since Early 2025"

According to the company, GVG has put that behind it. "Last year, we successfully completed numerous our self-financed expansion projects," looks back GVG COO Michael Hegemann; these include fiber optic networks in the Bavarian town of Schöngeising, the Hessian municipalities of Liederbach, Rockenberg, and Münzenberg, as well as in various municipalities in the Lower Saxon districts of Osnabrück and Diepholz.

According to the company, GVG has now built FTTH connections for 180,000 households in over 260 municipalities. Compared to 2024, the group increased the number of its active customers by 70 percent last year. "Since the beginning of 2025, we have been operationally positive," summarizes GVG CFO Susanne Küppers.

Own Sales and ISP

Company CEO Fellmann attributes the development to the strategic shift the company undertook starting in 2024, which is now paying off. The group consists of 17 companies, including its own sales subsidiary, "2localte."

Furthermore, since the beginning of 2025, the technical support for all GVG customers has been handled by the company's own Internet Service Provider (ISP) "2provide." This allows GVG Glasfaser to realize private and business customer offerings under the brands teranet and nordischnet independently and without third-party providers.

The fiber optic market is in a difficult phase. GVG Glasfaser sees itself "on a clear growth path against the industry trend." The Kiel-based company announces its intention to undertake new self-financed FTTH expansion projects this year. Palladio Partners also intends to continue investing in the Kiel fiber optic specialist for this purpose, GVG states.

(nie)