The mass roll-out of fibre networks is seen as the key to the expansion of digital services across major economies, but research from Kearney is warning that a €174bn funding shortfall facing Europe’s telecoms sector is putting 2030 gigabit and 5G connectivity targets at risk, meaning around 45 million Europeans could remain without adequate high-speed connectivity by the end of the decade.
In the European telecom health index, Kearney surveyed 20,000 consumers across 21 European countries using consumer research and commercial performance data.
Topline findings showed customer behaviour was a major barrier to monetisation, with weaker markets seeing higher switching, lower satisfaction and weaker bundling. Looking at successful territories, the survey showed that the leading countries are achieving take-up of up to 84% while fibre investments struggle in slow-adopter markets.
Kearney’s research shows Europe’s healthiest telecom markets are concentrated in the north, with Norway (82), Sweden (81) and Switzerland (76) leading the rankings. These countries typically combined strong fibre adoption, higher customer satisfaction and stronger commercial outcomes.
Specifically, in slow-adopter markets – Italy, the Netherlands, Poland, Ireland and Denmark – returns on capital employed have dropped to 6%, with fibre take-up closer to 45%. By contrast, high-performing markets such as Sweden, Norway, France, Spain and Portugal are achieving fibre take-up of up to 84%, supporting significantly stronger returns of 11%.
Assessing the reasons for lack of uptake in the laggard countries, Kearney’s report found that demand-side behaviour was the main barrier to fibre monetisation. In the bottom-five markets, including the UK, customers were 7% more likely to switch providers, 10% more likely to demand faster speeds, and 6% more likely to demand better customer service compared with those in stronger markets.
By contrast, the top-five countries – Sweden, Norway, France, Spain and Portugal – record significantly higher sentiment. Customers are 11% more satisfied with their mobile provider, 13% more satisfied with fixed broadband, and 13% more likely to hold multiple mobile subscriptions with the same provider. Stronger customer relationships also deliver better financial outcomes. In top-performing markets, operators typically saw average revenue per user rise by up to 15%, while customer turnover drops by 10-15%.
The UK ranked 18th out of 20 European markets, despite fibre reaching nearly 80% of homes across the nation. The report stressed that the UK still struggles with slow adoption and weaker customer sentiment, reflected in lower bundling levels of just 28%. The UK joins Belgium and Italy in the lowest-performing group – markets where fibre availability was growing, but commercial performance is failing to keep pace.
Kearney partner Christophe Firth noted that while there was no shortage of fibre in the ground, the returns for providers weren’t adding up, and that the challenge now would be to convert homes passed into paying customers, improving service experiences and rethinking how operators go to market.
“In some countries, operators have passed 90% of homes but connected fewer than 40% – that’s a massive commercial gap that needs to be addressed,” he said.
“Instead of chasing roll-out targets, operators need to focus on actually getting more consumers to sign up to the service. That means improving how they cross-sell fixed and mobile, creating bundles that genuinely appeal to households, making digital sign-up simpler, and targeting the right customers with the right offers. The infrastructure is already there – now, it’s about turning it into a consistent revenue stream.”
