Another week, another joint venture (JV) is established to help deploy expensive fiber-to-the-home (FTTH) networks in underserved regions of Europe.

This time it's the turn of Deutsche Telekom's (DT) Austrian unit, Magenta Telekom, which is teaming up with France-based investor and asset manager Meridiam to build an FTTH network covering 650,000 premises in towns and rural areas.

The two partners plan to invest a total of €1 billion (US$993 million) in the joint venture, with reports suggesting that Meridiam will own just over 50% of the new entity. Construction should start this year, although this will be subject to approval from the European Union.

Figure 1: The Austrian and French partners plan to pass 650,000 premises with a new FTTH network in Austria.
(Source: Deutsche Telekom)

For Magenta Telekom, which gained a hybrid coaxial fiber (HFC) network when it merged with UPC Austria in 2019, the project provides an opportunity to expand gigabit connectivity to over 2.5 million homes and businesses (or 60% of the total) in Austria.

As things stand, the operator's HFC network currently covers 1.5 million premises. In addition to the investment with Meridiam, Magenta Telekom has already announced plans to invest €1 billion in its fixed and mobile network.

Meridiam, meanwhile, launched its fiber strategy in 2020 and already has fiber construction projects in Austria, Germany, North America and Romania.

Fiber buddies

With this latest venture, Magenta Telekom is following in the footsteps of parent company DT, which has already established two fiber JVs in Germany: GlasfaserPlus with Australia's IFM Investors and the regional Glasfaser Nordwest venture with energy, IT, and telecoms group EWE.

Other European telcos have also been setting up separate fiber projects with similar ambitions. Spain's Telefónica has been particularly active here via infrastructure arm Telefónica Infra. The telco recently tied with an investor consortium comprising Crédit Agricole Assurances and Vauban Infrastructure Partners for the 50:50 Bluevia Fibra venture in Spain, for example.

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In the UK, Liberty Global announced the formation of a JV with Telefónica and InfraVia Capital Partners that will roll out FTTH to greenfield premises across the UK.

Elsewhere, Telefónica Infra has established FTTH vehicles in Brazil (FiBrasil) and Germany (UGG), in collaboration with CDPQ and Allianz respectively. In addition, Telefónica set up independent fiber infrastructure companies in partnership with KKR in Colombia and Chile. In both markets, the private equity firm holds a 60% stake while Telefónica's local businesses have each retained a 40% stake.

As for Vodafone, it is reportedly close to finalizing a JV that will help finance the construction of FTTH deployments in Germany. Notably, Vodafone Germany is already collaborating with Meridiam on the construction of an FTTP network for the community of Montabaur.

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— Anne Morris, contributing editor, special to Light Reading