Orange Poland has announced a partnership with Dutch pension fund APG that aims to speed the rollout and reduce the cost of its fiber-to-the-home (FTTH) network throughout the country.

The operator, which is majority owned by France-based Orange, said it has created a 50:50 joint venture called FiberCo with APG, which is the asset management division of ABP.

The new JV will take over 2.4 million connections, including 1.7 million households that are set to be passed by the network in the next five years.

The remaining connections are to be contributed by Orange Poland, which covered 5 million households with its fiber network at the end of 2020.

The new agreement with APG is the conclusion of a competitive process started by Orange Poland last year, with aim of securing a long-term partner. The goal is to bring fiber to areas where access to very high-speed broadband infrastructure is limited or non-existent.

The JV has been valued at around PLN 2.75 billion (US$723 million). APG is to pay about PLN 1.37 billion ($360 million) to Orange Poland, with 65% to be paid on closing and the remainder to be transferred between 2022 and 2026.

The deal is expected to be completed in August this year. Notably, Orange Poland has a call option to buy 1% of the JV in 2027-2029, in order to gain majority control.

Orange Poland will be the anchor tenant of the new FiberCo, which will be based on an open access model in order to provide wholesale services to other operators. According to Orange, the new venture has the opportunity to benefit from latent demand for high-speed broadband services in Poland.

The Digital Economy and Society Index (DESI) 2020 shows that Poland's overall fixed broadband takeup by household stood at 62% in 2019, compared to 78% in the European Union.

However, it was noted that in both takeup of fixed broadband with speeds of at least 100 Mbit/s, and mobile broadband takeup, Poland achieves better results than the EU average.

European plan

The Polish JV is a further strand of Orange's infrastructure strategy across its European footprint. For example, the operator recently announced its plan to spin out its mobile towers into a towerco called Totem.

It also created the Orange Concessions fiber unit in France and is in the process of selling a 50% stake in the company to La Banque des Territoires (a business unit of Caisse des Dépôts), CNP Assurances and EDF Invest.

Want to know more about optical? Check out our dedicated optical channel here on Light Reading.

The choice of APG/ABP as partner is notable as the pension fund only recently teamed up with KPN in the Netherlands on a new fiber venture there.

The former Dutch incumbent is already aiming to connect 2.5 million households in larger municipalities over the next five years; the new venture with ABP aims to add a further 700,000 households in villages and 200,000 premises in 1,400 business parks.

Related posts:

— Anne Morris, contributing editor, special to Light Reading