After Telekom, Vodafone now also wants to invest in fiber optic expansion. The aim is to make fiber optic connections available in seven million households. They want to work with the Luxembourg financial holding company Altice on this billion-euro investment.
The need for data is increasing rapidly in the internet age, stable transmission is extremely important for many people. Glass fiber is considered the technology of the future. After Deutsche Telekom and other Internet providers, the telecommunications group Vodafone in Germany now wants to get into fiber optic expansion on a large scale. Vodafone announced in Düsseldorf that they want to set up a joint venture with the Luxembourg financial holding company Altice, which will invest up to seven billion euros within six years.
The goal is to make fiber optics available in seven million households, reaching into the apartments. The company is to be founded in the first half of 2023. It is about so-called FTTH connections (“Fiber to the Home”). So far, Vodafone has only a few such connections, currently there are just over 40,000. Instead of FTTH, the company relies on television cable as the transmission path. Pure fiber optic Internet is considered more stable and faster, but such contracts are also more expensive for customers.
Vodafone is late with the expansion plans. Deutsche Telekom already ramped up its investments in 2020 and is picking up the pace. In mid-2022, Bonn was at 3.9 million. In an interim step, their FTTH network should be available to 10 million households by 2024. The expansion is then to continue, with Telekom also relying in part on a joint venture with Australian investors. Two years ago, Telefónica and the Allianz insurance group announced the establishment of a joint venture that intends to invest five billion euros within six years.
Vodafone is now taking a similar path to its competitors and is looking to team up with an external partner to handle the expensive fiber optic expansion. The debt that the planned company will take on will not weigh on the balance sheet. 80 percent of the FTTH connections should be located where Vodafone already has television cables, especially in apartment buildings and apartment buildings. There, customers then have the option of switching to pure fiber optics. 20 percent are to be built where no Vodafone landline network is available.
Vodafone boss Nick Read spoke of an important infrastructure investment that will help to achieve the federal government’s broadband goals. The government wants Germany to have nationwide fiber optic coverage by 2030. In the joint venture deal, Vodafone is providing a moderate cash injection, with most of the investment being financed through the joint venture’s debt. Over the years, Vodafone has received up to 1.2 billion euros from Altice for access to television cable customers.
The cash injection that Vodafone is giving to set up the company will reportedly be less than the total amount that the company will receive. The partner Altice is no stranger to Europe’s Internet industry; the financial holding company holds stakes in telecommunications companies in France and Portugal, among other places. Altice is already active in Germany through its subsidiary Geodesia.
Vodafone also announced that it is providing investments to upgrade its cable TV network. More distribution boxes (fiber optic nodes) are to be created and the upload speed is to be increased. With its current fixed network, Vodafone already relies largely on fiber optics. But on the last mile – that is, the stretch into the apartment – there are said television cables. These enable a download speed of up to 1 gigabit per second.