Vodafone, Altice agree €7B German fibre tie-up

Vodafone Group partnered with Altice on the creation of a joint venture fibre company in Germany, with plans to invest a combined €7 billion on a rollout across the country.

The new broadband company will be dubbed FiberCo, jointly owned by Vodafone and Altice, and aims to construct and operate a FTTH network to 7 million homes in six years.

As part of its plan, 80 per cent of the deployment will be focused on housing associations, tapping into Vodafone’s existing fibre cable network footprint, which are looking to upgrade. The remaining 20 per cent of its push will be outside of the operator’s current footprint.

FiberCo will also offer wholesale access to all telecoms providers in the country, “to fully exploit the potential of the infrastructure”.

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Debt financed
The transaction will see Vodafone receive cash proceeds from Altice of up to €1.2 billion, including an up-front €120 million at closing and deferred payments of up to €487 million as the rollout progresses. It can also include an additional €595 million pay-out based on performance.

The €7 billion investment sum will be 70 per cent financed by debt and there is currently no minimum revenue or volume commitment for FiberCo, added Vodafone.

Nick Read, Vodafone Group CEO, said the partnership built on its next-generation network along with Altice’s industrial expertise and proven FTTH capabilities, with the company already operating fibre ventures in France and Portugal.

“This significant infrastructure investment supports the country’s social, economic and digital development and the broadband ambitions of the German government and Europe’s digital decade targets,” Read added.

The deal is expected to complete in H1 2023, subject to customary closing conditions