Telefonica Is Creating A Subsidiary To Invest In Fiber In Germany

Telefónica to reduce its reliance on HuaweiHeadquarters of Telefonica Germany

Banco Sabadell | Telefónica is in the final stages of negotiating an agreement to set up an independent company, which would be responsible for the deployment of a fiber optic network in Germany. The investment in the project is about 5 billion euros, according to the press. Telefonica would structure the project through its subsidiary Telefonica Infra, which plans to sign an accord with an infrastructure fund and a group of financing banks around the end of October. The banks would lend two thirds of the resources required to build the fiber network and the rest would be capital provided mainly by the fund. The latter is in exclusive negotiations with the Spanish operator. It is likely that Telefónica Germany will acquire a minority stake in the capital and become an anchor client (the network would be open to other operators).

In the presentation of its Q2’20 results, the company commented that Germany is a market with little fiber deployment. That said, it is well covered thanks to wholesale agreements (the recently extended one with DTE, the one with Vodafone and the one with Tele-Culumbus). However, it did not rule out going along with Telefónica Infra/Telefónica O2 and some financial partner/fund to deploy fiber in areas where there is not any (they do not want to “overdeploy” the country), leaving it open to third parties.

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