Vodafone Deutschland’s ambitious plan to expand Germany’s fibre-optic infrastructure is facing a major hurdle as its key partner, Altice, considers selling its stake in their joint venture OXG.
The potential exit could impact Vodafone’s strategy to connect seven million households with high-speed broadband over the next seven years.
Altice has begun exploring potential buyers for its share in OXG, reports German newspaper Handelsblatt with reference to sources familiar with the negotiations.
Vodafone has not confirmed the reports, when approached by the newspaper, but stated that any sale would require its approval. A company spokesperson emphasized that OXG remains financially stable, with a credit line of €4.6 billion ensuring investment continuity over the next six years. The spokesperson added that Vodafone has already begun fibre-optic deployments in 21 cities, though this falls short of the original target of 150 cities and municipalities by the end of 2024.
If Altice proceeds with its exit, Vodafone could face further disruptions. Altice’s reputation has been tarnished by corruption and money laundering allegations involving several top executives, leading the company to divest multiple assets, according to the report. However, finding a buyer for its stake in OXG may prove challenging. Industry insiders suggest that rising interest rates and increasing construction costs have made fibre-optic investments less attractive.
A recent study by consultancy firm AlixPartners predicts that within the next two years, around two-thirds of fibre-optic projects in Germany will require fresh financing.
In this uncertain landscape, the potential withdrawal of Altice poses a significant risk for Vodafone’s fibre strategy. For Vodafone Deutschland CEO Marcel de Groot, maintaining the company’s competitive position in the broadband sector will require decisive action to navigate the looming industry shake-up.
