LONDON - Vodafone (NASDAQ:VOD) Spain, a subsidiary of Zegona Communications plc (LSE: ZEG), and MasOrange have signed a contract to establish a new fibre network company, FibreCo, which will operate the largest 100% fibre-to-the-home (FTTH) network in Europe. The network will cover 12.2 million premises across Spain, offering high-speed FTTH services to over 4.5 million customers.
The joint venture will combine the network assets of both Vodafone Spain and MasOrange, with the aim of enhancing the rapid adoption of new technologies like XGSPON and meeting high environmental, social, and governance (ESG) standards. The network is touted to deliver significant energy savings through more efficient network utilization.
FibreCo is expected to achieve an EBITDA of approximately €480 million after three years, with the parties currently seeking a third-party financial investor to join the share capital of FibreCo. This investor is anticipated to hold a 40% stake, while MasOrange will retain 50% ownership and Zegona is expected to hold the remaining 10%. The interest from potential investors has been strong, reflecting the value of FibreCo’s infrastructure and its multi-tenant nature.
This move comes after Zegona’s November 2024 announcement of a partnership with Telefónica de España to create another fibre network covering 3.6 million premises and to renew its fibre wholesale access contract. The creation of FibreCo with MasOrange is seen as a completion of Vodafone Spain’s transformation of its fixed line strategy, enabling nationwide FTTH services.
Eamonn O’Hare, Chairman and CEO of Zegona, remarked on the significant benefits of the partnership, including guaranteed access to a future-proof all-fibre national network, attractive economic terms, and substantial cost savings for the business. He also highlighted the potential for monetizing these network companies to provide returns to shareholders.
The transaction is subject to customary regulatory approvals and is expected to be completed by the end of the first half of 2025. This strategic partnership is based on a press release statement and aims to position Vodafone Spain and MasOrange at the forefront of Spain’s fibre network services.
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