Vodafone Group Plc will roll out fiber to the home in Germany in a deal with Altice Europe NV to share a €7 billion ($7 billion) investment in its biggest market.
(Bloomberg) — Vodafone Group Plc will roll out fiber to the home in Germany in a deal with Altice Europe NV to share a €7 billion ($7 billion) investment in its biggest market.
The 50-50 fiber venture with French billionaire Patrick Drahi’s Altice will build fiber optic lines to as many as 7 million homes in Germany, the companies said in a statement Monday. About 70% of the cost will be financed through debt raised against the new company, they said. The deal is expected to close in the first half of next year.
The deal could net the British telecommunications company as much as €1.2 billion in cash proceeds from Altice, which are expected to be higher than Vodafone’s share of equity contributions, according to the statement. The proceeds include €120 million at closing, deferred payments of much as €487 million as more homes are connected and another €595 million based on performance.
Four-fifths of the proposed network will focus on large housing associations within Vodafone’s current footprint, and the rest would focus on neighboring homes. It will sell wholesale access to rival telecommunication providers.
As data demand booms, telcos are sharing infrastructure projects with high costs and long-term paybacks with financial investors and rival operators. Fiber is often seen as the most reliable technology, and even cable-heavy groups like Liberty Global Plc have started overlaying cable networks with fiber.
Germany became Vodafone’s biggest market after it bought cable operator Unitymedia along with other units from Liberty for €18.4 billion in 2019. Since then, Vodafone has been hit by technology and regulatory hiccups which have hurt performance in the country.
In 2021, Liberty returned to Germany and started a fiber optic joint venture, underscoring the opportunity.
Vodafone shares fluctuated in early trading and were little changed at 8:03 a.m. in London.
(Updates with details on the deal from fourth paragraph)
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