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Vodafone Group PLC on Monday said it is creating a joint venture with Altice Ltd to deploy fibre-to-the-home to up to seven million homes in Germany over a six-year period.
Vodafone is a Berkshire, England-based technology communications company which operates mobile and fixed networks in 22 countries, and partners with mobile networks in 47 more. Altice is a telecom, content, media and advertising business led by Patrick Drahi.
The joint venture, to be named FibreCo, is designed to complement Vodafone's upgrade plans for its existing hybrid fibre cable network.
FibreCo will be owned 50% by Vodafone Germany and 50% by Altice.
As part of the transaction, Vodafone is expected to receive from Altice of up to €1.2 billion in cash. This includes an upfront payment of €120.0 million at closing, additional deferred payments of up to €487.0 million once the first 1.5 million homes have been passed, and an earn-out of up to €595.0 million based on FibreCo's performance.
Approximately 80% of the roll-out will be focused around large housing associations in Vodafone's existing hybrid fibre cable network footprint which are interested in fibre upgrades.
The remaining 20% will be outside of Vodafone's current footprint, focusing on neighbouring homes.
Vodafone said FibreCo will benefit from its commercial expertise and relationships with housing associations, and Altice's unique fibre-to-the-home roll-out, wholesale and operational expertise.
FibreCo has contracted Geodesia, a subsidiary of Altice, for the majority of construction and maintenance.
‘This significant infrastructure investment supports the country's social, economic and digital development and the broadband ambitions of the German government as part of Europe's Digital Decade targets’, said Chief Executive Nick Read.
Vodafone expects FibreCo to be fully completed by the first half of 2023.
Vodafone shares were trading 0.3% higher at 99.86 pence each in London on Monday morning.
Altice Europe NV has an 18% shareholding in Vodafone peer BT Group PLC. BT shares up 0.5% at 123.30p.
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