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Optical fiber: Telefónica and Allianz build FTTH in Germany

Last updated on March 9, 2021

Telefónica Deutschland and the insurance group are new to the fiber optic business. You want to connect 2.2 million households.

Telefonica boss Markus Haas (Image: Telefonica)

Together with the alliance, the Telefónica Group wants to found a new fiber optic company that will supply up to 2.2 million households in predominantly rural and underserved regions with fiber optic connections right into the home (FTTH) over the next six years. The mobile operator Telefónica announced this on October 29, 2020.

The fiber optic network will have a length of over 50,000 kilometers and will be operated by a wholesale company. One is open to other partners.

After the deal, the Telefónica Group and Allianz will each hold 50 percent of the joint venture. The Telefónica Group participates through the infrastructure subsidiary Telefónica Infra with 40 percent and Telefónica Deutschland with 10 percent. Allianz Capital Partners and the Allianz European Infrastructure Fund will invest 50 percent in the joint venture. For the insurance group, FTTH networks are extremely interesting as a long-term profitable investment. Telefónica Deutschland is the only mobile operator in Germany that does not have its own fixed network.

Telefónica: Germany is a developing country for fiber optics

5 billion euros will be invested over the next six years. Telefónica Deutschland will invest up to 100 million euros for its ten percent stake and provide the joint venture with transport services for data traffic in the local fiber optic network via the existing transport network. The transaction is subject to the approval of the competent merger control authorities, in particular the EU Commission.

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Telefónica Deutschland boss Markus Haas said: “With over 80 million inhabitants, Germany is the largest broadband market in Europe. Nevertheless, Germany has so far been a fiber optic developing country: not even ten percent of households currently have a future-proof fiber optic connection right into the house.” Currently only two national providers serve the fiber optic market, these are Deutsche Telekom and Deutsche Glasfaser Holding. Glass fiber will end the copper monopoly in Germany in the medium term, said Haas. Optical fiber will be the decisive broadband technology for the next 30 to 40 years.

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