Joint ventures, divestments, restructuring. These have been recurring themes at Telefónica under CEO José María Álvarez-Pallete – most notably in Latin America, Germany and the UK – as he looks to strengthen the Group's balance sheet and find extra cash (and spread the cost) to fund 5G and FTTH rollouts.

If Bloomberg sources have got their facts straight, however, Telefónica is now looking to do some FTTH wheeling and dealing on its home turf. According to the report, Telefónica is mulling the possibility of selling a minority stake in its Spanish fiber network. Any transaction, said the sources, could value the business at around €15 billion ($17.3 billion) as a standalone entity.

One unnamed source told Reuters that "there's loads of interest from funds for a 15%-35% stake." Market thinking, at least according to this report, is that investors will want to sit tight for a few years before selling up. The hoped-for ROI is apparently 7% to 8%.

Bloomberg sources nonetheless emphasized that deliberations are at early stages, with Telefónica only at the point of sounding out potential advisors about a carve-out of the unit ahead of a possible deal to bring in new investors. Any deal struck is not likely to happen until 2022, they added, and nor did they rule out Telefónica simply scrapping the idea altogether.

Light Reading asked Telefónica to comment on the veracity of the Bloomberg report but hadn't received a reply at the time of writing.

Dancing to the fiber co-investment rhythm in Latin America

Telefónica's relatively new fiber co-investment and wholesale model, unveiled by the Spanish giant in late 2019 as part of a major organizational and strategic revamp, has seen plenty of action in Latin America.

Early this year, Telefónica's mobile and fixed-line operation in Brazil entered into an agreement with Canada's Caisse de dépôt et placement du Québec (CDPQ), a global investment group, for the construction, development and operation of a "neutral and independent optical fiber wholesale network in Brazil."

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The new company, dubbed FiBrasil, is to adopt a "co-governance model" involving Telefónica Group and CDPQ. Each holds a 50% stake.

Telefónica has also agreed to set up an independent fiber infrastructure company in partnership with KKR in Colombia. The private equity firm will hold a 60% stake and Telefónica Colombia the remainder. Telefónica previously forged a similar deal, again with KKR, for its fiber assets in Chile.

— Ken Wieland, contributing editor, special to Light Reading