Updated on Wednesday, 6 October 2021 – 13:53
The company is studying the entry of partners in its deployment of 26 million connections to Spanish homes. Divestment in infrastructure will serve to reduce debt and prepare for new investments
Jos Mara lvarez-Pallete, CEO of Telefnica.
Telefnica’s Spanish fiber network, valued at 15,000 million euros, is open to investors. The Spanish telecommunications multinational is considering selling a stake in that asset, one of its crown jewels, as published by Bloomberg. According to that news agency, the operation is still in an initial phase, so that any type of agreement will not reach in 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 Jos Mara lvarez-Pallete of divest assets to reduce company debt. A month ago, the CEO of Telefnica already valued the “optionality” of its infrastructures, that is, the possibility that they were opened to third parties that would facilitate deployments and soften the passive commitments of the Spanish company. In fact, the infrastructure sector is going through a hopeful moment in the eyes of investors, with generous returns that have nothing to do with the telecommunications business itself, mired in low cost and with income that does not even keep pace. of inflation.
Fiber, however, is an option for the future, but the hypothetical entry of an investor would consequently reduce the income that Telefnica manages to inject in this way, by renting to third parties. Fiber-to-the-home (FTTH) deployment 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 stressed by the President of the Government Pedro Snchez in the months of confinement due to the pandemic. The Telefnica network, in particular, involves the largest fiber deployment of a private company in Europe.
Last July, Telefnica carried out a similar operation in Colombia, where it entered the KKR fund. Previously, the company has partnered in other countries such as Chile, Germany and Brazil, these last two key territories for its 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 as justified by the investment magnitude of the future fiber deployment as by the interest in covering new investments , for example that of mobile technology concerning 5G. In addition, the operation would help assess the stated objective of lower the company’s debt, which at the beginning of summer stood at around 25,000 million euros. Five years earlier, when in June 2016 Álvarez-Pallete succeeded Csar Alierta at the head of the teleco, that liability was estimated at approximately 52,000 million.
Virgin Media O2, the British operator merged and participated by Liberty Global and Telefnica, is also studying the entry of third parties before the deployment it plans for the United Kingdom. Fiber assets are not the only infrastructures in which Telefnica has divested: at the beginning of this year, the multinational signed an agreement for its subsidiary Telxius to sell its telecommunications tower division in Europe (Spain and Germany) and in Latin America ( Brazil, Peru, Chile and Argentina), for 7,700 million euros.
According to the criteria of
The Trust ProjectLearn moreSee links of interest Bara – Casademont Zaragoza