Status: 02/20/2023 5:18 p.m
Competitor Telekom already offers fiber optic connections for millions of households, and Vodafone is following suit. The EU Commission has now approved a joint venture of the British group for grid expansion.
The telecommunications group Vodafone has cleared another hurdle in its multi-billion dollar plans to expand fiber optics in Germany. The EU Commission announced today that the European competition watchdogs have approved a planned joint venture between Vodafone and the Luxembourg financial holding Altice.
Investments of up to seven billion euros
The new company is to invest up to seven billion euros in six years and lay fiber optics in up to seven million households. Vodafone Germany boss Philippe Rogge spoke of the starting signal for even more fiber optics in Germany. “We will bring the first customers online this year,” he told the dpa news agency.
However, Vodafone is late with this. Competitor Deutsche Telekom has been investing large sums in the business for years. By the end of 2022, the group said it already had a range of 5.2 million connections with its fiber optic network. By next year there should be more than ten million connections.
Financing through debt
So far, Vodafone had mainly used television cable as a transmission path for high-speed Internet in Germany. Fiber optic lines directly into households – the so-called “Fiber to the Home” (FTTH) – enable even faster data transmission and are more stable. With the new joint venture, the British company now wants to try to close this gap.
The expansion of the technology is mainly planned where Vodafone already has a cable network – and the lines can be converted to FTTH connections.
The partners want to finance more than two-thirds of the planned investments with their joint venture called FibreCo through debt. Looking for other investors for such an expensive network expansion is common in the industry. The Vodafone rivals Deutsche Telekom and Telefónica also followed a similar path. For example, Telekom formed an alliance with the Australian investor IFM, and Telefónica founded a joint venture with the Allianz Group.