Vodafone, Altice target 7M locations with new German fiber JV

European operators Vodafone and Altice teamed up to tackle a major fiber opportunity in Germany, announcing plans to form a joint venture (JV) which will invest up to €7 billion ($6.85 billion) in rollouts there over the coming years.

Through the JV, the operators said they plan to deploy fiber-to-the-home to up to 7 million locations in Germany. The vast majority (80%) of deployments will focus on large housing associations within Vodafone’s existing cable footprint which have expressed an interest in fiber. The rest of the build will focus on adjacent locations outside of Vodafone’s current territory. Rollouts are expected to occur over a six-year period, with Altice subsidiary Geodesia contracted for construction and maintenance of the new infrastructure.

Wholesale access to the network will be offered to all service providers, the pair said, with Vodafone Germany serving as anchor tenant on the network.

Creation of the 50-50 JV is expected to be complete in the first half of 2023. As part of the deal, Altice will pay Vodafone a total of up to €1.2 billion, including a €120 million upfront payment at closing, deferred payments totaling €487 million and a performance based “earn-out” of up to €595 million.

Altice co-CEO David Drahi said in a statement the operators’ respective strengths “will help us establish one of the largest FTTH ventures in Europe.” He added “We have pioneered fiber joint ventures in France and Portugal, and are thus thrilled to be able to replicate such a feat in Germany with such a partner.”

Vodafone noted the fiber deployment will be happening as it works to upgrade its cable assets in the country with high-splits and, eventually, DOCSIS 4.0.

The JV announcement comes after Vodafone CEO Nick Read last year highlighted the German market as a major opportunity for the operator and hinted it was exploring potential joint venture activity.

But the operator is not the first to see an opening there. Telefonica was the first to strike a JV deal targeting the German market in October 2020, and was followed by Liberty Global, which inked a deal with a private equity firm in September 2021.

Deutsche Telekom secured €900 million from Australian investors for a rural fiber JV in the country in November 2021, and the following month upped its solo fiber deployment target to 10 million households by 2024.

According to FTTH Council Europe’s May 2022 Market Panorama report, Germany is set to be number three in terms of homes passed by 2027, with 26.9 million, following France (31.1 million) and the U.K. (30.1 million).