The Fiber Network of Telefónica in Spain: an asset of 15,000 million that opens on international investors

The Spanish Fiber Network of Telefónica, valued at 15,000 million euros, is open to investors. The Spanish multinational Telecommunications decks selling a pa

The Fiber Network of Telefónica in Spain: an asset of 15,000 million that opens on international investors

The Spanish Fiber Network of Telefónica, valued at 15,000 million euros, is open to investors. The Spanish multinational Telecommunications decks selling a participation of that asset, one of its crown jewelry, as Bloomberg has published. According to that news agency, the operation is still at an initial phase, so that any type of agreement would not reach any case before 2022.

The possibility of entry of shareholders in its fiber network, which reaches 26 million properties, would fit with the recognized purpose of José María Álvarez-Pallet to detach assets to reduce the debt of the company. Mese back the executive president of Telefónica has already put into value the "optionality" of his infrastructures, that is, the possibility of opening third parties that would facilitate deployments and soften the passive commitments of the Spanish company. In fact, the infrastructure sector crosses a hopeful moment in the eyes of investors, with generous returns that have nothing to do with the telecommunications business, plunged into the low cost and with income that does not even keep up with rhythm of inflation

The fiber, however, is a future option, but the hypothetical entry of an investor would consequently reduce the income that Telefónica manages to inject by that way, through rent to third parties. The deployment of fiber to the home (FTTH) is greater in Spain than in any other European country, a deployment that has been valued both from the company and from the Government itself, as the President of the Government Pedro Sánchez recalled in the months of confinement by the pandemic. The telephone network, specifically, supposes the greatest deployment of fiber of a private company in Europe.

Last July, Telefónica carried out a similar operation in Colombia, where he entrance to the KKR fund. Previously, the company has partnered in other countries such as Chile, Germany and Brazil, these two last key territories for your business. Now, in Spain is the heart of the company and the network is more widespread, at least in urban areas, so the operation would not be so justified by the investment magnitude of the future deployment of fiber as for the interest in covering new investments , for example the mobile technology concerning 5g. In addition, the operation would contribute to the aquilaratory the declared objective of lowering the debt of the company, which at the beginning of summer was about 25,000 million euros. Five years before, when in June 2016 Álvarez-Pallete happened to Caesar aliens at the front of the teleco, that passive was approximately 52,000 million.

Virgin Media O2, the British operator fused and participated by Liberty Global and Telefónica, also studies to entry third actors before the deployment planning for the United Kingdom. Fiber assets are not the only infrastructures in which Telefónica has disinverted: earlier this year, the multinational signed an agreement so that its Telxius subsidiary sold its telecommunications towers division in Europe (Spain and Germany) and in Latin America ( Brazil, Peru, Chile and Argentina), for 7,700 million euros.

Updated Date: 08 October 2021, 13:41

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