European telcos Vodafone Group and Altice are creating a joint venture to deploy fibre-to-the-home (FTTH) to up to 7 million homes in Germany over a 6-year period.
Vodafone currently operates a hybrid fibre cable network in Germany, offering up to 1Gbps connections to over 24 million homes. This partnership with Altice is complementary to Vodafone’s upgrade plans for its existing cable network, the telco stresses in a statement. This includes bringing fibre connections closer to all connected homes through ‘node splitting’ and DOCSIS 3.1 ‘high split’, which enables download speeds of over 3Gbps. These upgrade plans, coupled with next generation technology advances, such as DOCSIS 4.0, provide a path to 10Gbps speeds across the hybrid fibre cable network over time.
The joint venture FibreCo, owned 50% by Vodafone Deutschland and 50% by Altice, plans to construct and operate a FTTH broadband network available to up to 7 million homes. Around 80% of the rollout will be focused around large housing associations in Vodafone’s existing hybrid fibre cable network footprint which are interested in FTTH upgrades. The remaining 20% of the deployment will be outside of Vodafone’s current footprint, focusing on neighbouring homes.
FibreCo will offer wholesale access to all telecommunications service providers, to fully exploit the potential of the infrastructure. According to the partners, FibreCo will benefit from Vodafone’s commercial expertise and relationships with housing associations and Altice’s FTTH rollout, wholesale and operational experience. FibreCo has contracted Geodesia, a subsidiary of Altice, for the majority of the rollout construction and maintenance.
Within FibreCo’s footprint, Vodafone Deutschland has committed to market FibreCo’s network to new customers on an exclusive basis, whilst Vodafone Deutschland’s existing network will continue to service customers who do not wish to migrate to FTTH.
As part of the Transaction, Vodafone is expected to receive cash proceeds from Altice of up to €1.2 billion. Over the roll-out period, FibreCo intends to invest up to €7 billion, of which 70% is expected to be financed by debt that will be non-recourse to Vodafone and Altice.
The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the first half of 2023.
