In an agreement with Altice Europe, Vodafone Group will roll out Fiber-to-the-Home in Germany as part of a €7 billion investment in its largest market. This collaboration complements Vodafone’s well-defined objectives for upgrading its current hybrid fiber cable network.
According to a statement released by the two corporations on Monday, FibreCo, a 50/50 fiber partnership between Vodafone and Altice, will deploy fiber optic lines to as many as 7 million residences in Germany. Approximately 70% of the cost will be covered by debt raised by the new company. The transaction is scheduled to be completed in the first half of 2023.
The transaction is thought to yield Vodafone up to €1.2 billion in cash proceeds from Altice, which is projected to exceed Vodafone’s portion of stock commitments. The profits include €120 million upon closure, up to €487 million in deferred payments as additional homes are connected, and another €595 million based on performance parameters.
Four-fifths of the proposed network would target major housing associations within Vodafone’s current coverage footprint, with the remainder targeting surrounding households. The company will sell wholesale access to competing telecommunications companies. Vodafone Germany will serve as the anchor tenant, entering into an arrangement with FibreCo following the transaction’s completion.
Nick Read, Vodafone Group Chief Executive, commented: “This partnership builds on Vodafone’s significant next-generation network with Altice’s industrial expertise and proven Fiber-to-the-Home construction capabilities enabling us to bring gigabit connectivity to even more customers in Germany. We are proud of our long-standing relationships with housing associations and pleased as a trusted provider to bring more connectivity options for tenants.”
David Drahi, co-CEO of Altice, said: “We are delighted and honored to join forces with Vodafone to build and operate an FTTH network connecting up to 7 million premises in Germany. We have pioneered fiber joint ventures in France and Portugal, and are thus thrilled to be able to replicate such a feat in Germany with such a partner.”