Vodafone, Altice Forge €7 billion German fiber collaboration
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Vodafone Plc Group (NASDAQ: VOD) and Altice created a joint venture (FibreCo) to roll out fiber to the home (FTTH) to 7 million homes over six years.
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FibreCo plans to invest up to 7 billion euros, which will probably be 70% financed by debt.
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Patrick Drahi’s 50-50 fiber optic venture with French billionaire Altice will build fiber optic lines to up to 7 million homes in Germany.
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The deal will likely be completed in the first half of next year.
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Vodafone is likely to receive cash proceeds from Altice of up to €1.2 billion, comprising an upfront payment of €120 million at closing, additional deferred payments of up to €487 million and earn-out up to 595 million euros.
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Around 80% of the proposed network will focus on significant housing associations within Vodafone’s current footprint, with the remainder focusing on neighboring homes.
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It will sell wholesale access to competing telecommunications providers.
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Vodafone CEO Nick Read commented: “This significant infrastructure investment supports the social, economic and digital development of the country and the German government‘s broadband ambitions as part of the goals of the European Digital Decade.
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Altice co-CEO David Drahi commented, “We pioneered fiber joint ventures in France and Portugal and are therefore delighted to be able to replicate such a feat in Germany with such a partner.”
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Germany has become Vodafone’s biggest market after buying cable operator Unitymedia and other units for 18.4 billion euros in 2019, Bloomberg reports.
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In October, Vodafone confirmed discussions with CK Hutchison Holdings LTD (OTC: CKHUF) on a possible combination of their UK operations.
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The deal would involve combining Vodafone UK and Three UK, with Vodafone owning 51% and CK Hutchison owning 49% of the new unit.
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The UK government rightly sees 5G as transformative for the economy and society and essential for the country to become more competitive in an increasingly digital world.
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Price Action: Shares of VOD traded up 2.32% to $11.48 pre-market when last checked on Monday.
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