In the presentation of results to investors sent to the National Securities Market Commission (CNMV)Movistar explains that it will launch, together with Telefónica Infra, the creation of a FibraCo with the objective of reach 5 million real estate units (UUII, that is, homes, premises and offices) in more remote areas. By the way, they will accelerate the disappearance of ADSL.
Copper Quench Advance
At the end of 2021, Movistar covered more than 26.9 million real estate units in Spain with its fiber networkcompared to 25.21 million the previous year, which demonstrates its commitment to converting virtually all of its copper business to fiber.
Through this fiber expansion plan to rural areas, Telefónica will accelerate the closure of copper from its planned date, 2025, to 2024. By the end of that year, Telefónica will have closed 2,854 ADSL exchanges. Since the start of the copper quenching process in 2015, the company has started the closure of 1,443 plants, which has led to energy savings of 1,000 GWh due to lower fiber consumption.
The intention of the operator to develop this FibreCo would be to give entry to a financial partner. Telefónica will own 55% of the new company through Telefónica Infraleaving the remaining 45% in the hands of that investment partner yet to be finalized.
Similar plans in other countries
Similar plans have been developed in the past in other countries, with an association in Germany that can serve as a reference on the operations that will be carried out in Spain as long as that investment partner is found.
In 2020, Telefónica and Allianz partnered to deploy fiber in Germany through a wholesale platform, each with a 50% stake in the company, under a co-control model. It was a wholesale platform, independent and with non-discriminatory access, focused on the deployment of fiber in rural and semi-rural areas of Germany, with an investment volume of approximately 5,000 million euros, distributed over the following 6 years.
The new company aimed to deploy more than 2 million homes passed in rural and semi-rural areas, through a fiber network of more than 50,000 kilometers, while generating environmental benefits through energy efficient operations and enabling the transition to the fiber in the deployment areas. As we can see, the plans for Spain are much more than twice as ambitious in terms of the number of households that have been set as a goal.
In South America, Telefónica has partnered with CDPQ in Braziland in Colombia and Chile, with KKR. These plans could also reach other European territories such as United Kingdomwhere Telefónica and its partner Liberty Global are also negotiating the entry of a financial partner in its FibreCo.