Wholesale broadband networks are becoming all the rage in Europe, with the latest plan to offer fiber access infrastructure to retail service providers springing up in Portugal, where Altice Europe has struck up an equity partnership with Morgan Stanley Infrastructure Partners.
Under the agreement, Morgan Stanley will acquire a 49.99% in Altice Portugal FTTH, part of Altice Europe's local subsidiary MEO, for an initial payment of €1.565 billion (US$1.74 billion), with the deal set to close in the first half of next year. The agreement also includes further conditional, performance-related payments of €375 million ($418 million) in December 2021 and the same amount in December 2026.
The move was signaled in February this year as part of Altice's attempts to reduce its significant debt pile, which currently stands at €30.6 billion ($33.8 billion).
As part of that same debt reduction strategy, Altice struck a similar deal to sell a near 50% stake in its French FTTH business SFR last year.
This isn't the first time Altice has dealt with Morgan Stanley -- the investment bank's infrastructure unit was part of a consortium that acquired a 75% stake in Altice's Portuguese towers business last year.
Altice Portugal, which is essentially the fiber assets of the former national incumbent Portugal Telecom (acquired by Altice in 2015), has fiber access infrastructure that passes about 4 million homes in Portugal, which according to numbers from Statista, represents almost national coverage.
Altice believes taking a former incumbent and making it a purely wholesale operation is a European first.
Wholesale fiber operations are springing up around Europe as the importance of fiber access infrastructure to national and regional digital strategies, and to the 5G plans of Europe's telcos, becomes increasingly apparent. Wholesale fiber player CityFibre has been the catalyst for a ramp in FTTH investments across the UK, while Open Fiber in Italy, Germany's Deutsche Glasfaser, Gagnaveita Reykjavikur in Iceland and SIRO in the Republic of Ireland are all building out wholesale fiber assets that are impacting broadband developments in their respective countries.
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— Ray Le Maistre, Editor-in-Chief, Light Reading, special to Broadband World News