Germany ICT Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Germany ICT market is expected to grow at a CAGR of 9.7% over the forecasted period. Germany's ICT sector distinguishes itself by creating innovative software and security solutions, using the country's strong workforce, a robust market for technological innovations, and the collaborative support of industry and government in funding for research. Furthermore, the increasing adoption of IoT-based devices across various industries, including BFSI, IT and Telecom, Retail and E-commerce, and others, is propelling the ICT technology industry in the country.

Key Highlights

• Germany's ICT market is gaining traction with advanced technology, such as cloud computing. Artificial Intelligence is also extending its application across the end-user segment, fueling the market growth over the next five years. For Instance, 5G became a new engine for industrial digital transformation. Cisco announced it is collaborating with Axians, a Vinci Energies brand, to provide Cisco private 5G to enterprises across industries in Germany and the Netherlands.
• The increasing infrastructure developments, such as smart city and data center construction, would drive the ICT market growth over the next five years. For Instance, ZTE Corporation signed a 5G innovation cooperation agreement with True Group. Through this cooperation on the 5G joint innovation center to develop 5G networks, digital services, smart islands, intelligent manufacturing, research innovation, talent training, and other fields, with outstanding commitment to comprehensively carrying out 5G-oriented innovative technology and business cooperation.
• Key players in the ICT market are focusing on expanding their businesses and strengthening their cloud services through collaborations and partnerships. For Instance, IBM collaborated with SAP to deliver technology and consulting experience to help clients embrace a hybrid cloud strategy and migrate mission-critical workloads from SAP systems to the cloud in regulated and non-regulated industries.
• Germany prospered due to globalization, but the global network of supply chains that gave it is economy a significant boost may now be a severe drawback. Executives and policymakers are compelled to evaluate supply chains and try to lessen reliance on a small number of Asian and American suppliers. It is due to shortages of semiconductors and other industrial components that threaten the nation's economic recovery.
• Due to the COVID-19 pandemic, the demand for IT services adoption and Telecom services saw a positive rise, augmented by technology demand growth due to shutdowns. Companies upgrading IT infrastructures to support remote working amid shutdowns may have shifted the workloads to the public and private cloud. ​ Over the coming years, this is expected to drive the demand further as enterprises move towards cloud and remote working models, creating new growth opportunities for the ICT market.

Key Market Trends

Rapid Rise in Digitalization and Scalable IT Infrastructure

• Germany slightly outperforms the EU average in terms of digitalization. When connected to ultra-fast broadband, it performs poorly. Also, German businesses focus strongly on security and data protection while fusing new digital technology with industrial innovation.
• The economy, government, and vast portions of the country aim to speed up digitalization by investing in digital infrastructures, devices, software, and services. Furthermore, digital services have greatly benefited users, and new business opportunities have developed.
• Domestic investment in information technology and telecommunications sometime increased by almost 4.2% in the previous year, according to the German digital organization Bitkom. Also, sales are expected to increase by 4% from last year. As a result, IT software and hardware sales will continue to be strong in the upcoming years.
• Furthermore, as a collaborative effort of federal governments, municipalities, and the telecommunications sector, the Gigabit Strategy is the ultimate goal of achieving sustainable digitalization. Last year, the National Digital Strategy and the Gigabit Strategy for Germany aimed for a universal supply of fiber optic and cutting-edge mobile communications technology by 2030.
• Noticeably, Germany is ranked 13th out of 27 EU Member States per the Digital Economy and Society Index of last year. Germany achieved good progress in the previous five years. Germany's success with digital transformation in the upcoming years would be essential in enabling the EU to meet its 2030 Digital Decade ambitions.

Robust Internet Coverage Across the Country

• In Germany, using the internet is a part of daily life. Many people find it impossible to imagine a world without the internet. Consuming media, watching videos, shopping, keeping in touch, working, scheduling appointments, travels, and tickets, taking online courses and degrees, and using social media are just a handful of the many ways that the internet impacted their daily life.
• Germans are becoming more and more frequent online users. While 98% of web users did it at home, 81% did so elsewhere. Internet cafés are gradually becoming outdated due to the extensive mobile devices used for online activities outside of using a desktop computer at home and the expansion of free public Wi-Fi choices. Passengers on urban transportation networks may have access to their Wi-Fi network.
• Internet connectivity in Germany significantly increased recently, just like in any other major global economy. Social media gained popularity nationwide, and its platforms are frequently utilized to promote goods and services. The German railroad business Deutsche Bahn is a beautiful illustration of this, as it offers customer support through the Twitter platform. Free public Wi-Fi grew in popularity, broadening the Internet user base at coffee shops, bookstores, and libraries.
• The broadband internet cost in the nation decreased recently. Due to this, German telecom firms are now more competitive, which is good news for Internet addicts. Internet and telephone access are frequently provided in Germany at varied monthly costs. The service provider often determines the prices and the Internet speed.
• Since last year, Germany is one of the EU's top-performing nations in increasing internet access. The general public in Germany was curious about the internet and using online services. 96% of German households had an internet connection in 2020. According to ARD/ZDF, the number of internet users in Germany grew to 67 million by the end of the previous year. It indicates that the demand for the ICT market is expected to grow significantly.

Competitive Landscape

The Germany ICT Market is highly competitive, owing to the presence of many small and large players. The market is moderately concentrated, with major players such as ZTE Corporation, Ciena Corporation, Cisco Systems Inc., CommScope, Inc., and Fortinet Inc. They are adopting strategies like product innovation, service innovation, mergers, and acquisitions to stay ahead of the competition and increase their reach. The current advancement in the market:

• February 2022 - CommScope announced that Vodafone Germany would deploy its Touchstone TG6442 DOCSIS 3.1 cable gateways to deliver Wi-Fi 6 performance to millions of subscribers.
• January 2022 - Ericsson and Deutsche Telekom have collaborated to launch a new 5G Standalone (5G SA) private campus network service for on-site corporate communications infrastructure. The new campus network service is built on a local 5G infrastructure dedicated to the customer's digital applications. The 5G SA technology operates without LTE anchors (as in 5G NSA). It provides all of the technological benefits of 5G, including rapid data transfer speeds, maximum network capacity, and highly robust connectivity with minimum latency.

Additional benefits of purchasing the report:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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