Industry Updates

'SAMENA Daily' - News

Orange forms FTTH JV in Poland

Orange has teamed up with pension fund management giant APG to create a wholesale broadband network joint venture that aims to take fibre-based broadband connectivity to 1.7 million homes in rural and other underserved areas in Poland.

Orange has formed an operation called Światłowód Inwestycje (also referred to as FibreCo) and will sell a 50% stake in FibreCo to APG for 1.374 billion Polish zlotys (€302.5 million), giving FibreCo a valuation of €605 million.

The move mirrors Orange’s strategy for rural fixed broadband coverage in France, where it attracted a number of external investors for its rural FTTH rollout unit Orange Concessions. (See Orange creates Orange Concessions to support its fibre development in rural areas.)

The aim is to pass 2.4 million homes in areas of Poland that have limited fixed broadband infrastructure: The telco giant’s local operation, Orange Polska, is contributing existing fibre network rollout assets covering 700,000 households to the joint venture, which will then aim to build out an access network covering the other 1.7 million targeted properties by 2025.

The partners estimate the capex needed for the rollout plan is PLN3 billion (€662 million): Orange Polska will be a major supplier of network rollout services and expertise to FibreCo at fixed cost levels.

The joint venture will operate as an open-access company, selling wholesale broadband access services to Orange Polska and other retail ISPs. Orange believes this is the most efficient way to expand its fibre broadband footprint outside urban areas, allowing Orange Polska to “monetise its fibre investments both in retail and wholesale operations.”

FibreCo will significantly increase the operator’s fibre broadband reach: Orange Polska ended 2020 with 5 million households passed by its existing national fibre broadband network and 725,000 fibre broadband customers (27% of its total broadband customer base of 2.7 million, with xDSL accounting for 50% and fixed wireless access 23% of the total).

“This partnership with APG is excellent news for Orange Polska. APG is a global leader in infrastructure management and will provide us with the financial backing necessary to achieve our ambitious five-year fiber roll-out program in Poland,” noted Mari-Noëlle Jégo-Laveissière, Deputy CEO of Orange in charge of European Operations (outside France). “Together we will be able to bring fiber to an additional 1.7 million homes mainly in areas that still lack reliable internet access across the country. This ambition will be backed with a tried-and-tested business model that aims to maximize available revenues by opening-up wholesale access to third-party operators. This is a clear win-win for everybody that will also contribute to social and economic development in the country,” she added.

Orange says the move is part of its ongoing Engage 2025 strategy, which includes commitments to joint investments and asset monetization. In addition to FibreCo in Poland and Orange Concessions in France, Orange recently created Totem, which will manage the telco’s mobile towers in France and Spain as a wholesale operation and generate additional revenues from the operator’s infrastructure assets. (See Orange's Totem goes for pole position in race to exploit passive infrastructure assets.)

For APG, which is the investment administrator of a number of Dutch pension funds, the move follows its fibre broadband investment in the Netherlands, where, on behalf of Dutch pension group ABP, it has teamed up with national operator KPN to build out fixed access infrastructure in rural areas.

All of this is good news for Europe’s digital sector: Following years of limited investment in fibre access network infrastructure, the region is now awash with fibre network build projects run by traditional telcos and an increasing number of alternative operators, many of which are being funded by private equity firms and other major capital investment vehicles such as pension funds.



Source: https://www.telecomtv.com/content/access-evolution/orange-forms-ftth-jv-in-poland-41217/

ATTENTION