Telefónica is set to launch a joint fiber venture with Vodafone in Spain. The venture could reportedly carry an enterprise value of around EUR 2 billion.
The telcos have enlisted investment banks, Barclays and BBVA, to help manage the sale of a 40% stake in the joint venture, which is expected to generate approximately EUR 800 million. This marks a critical phase in the development of the partnership, which was first hinted at in July.
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The newly formed entity, FibreCo, aims to roll out a fiber network covering 3.5 million premises across Spain. Telefónica is set to maintain majority control of the venture, while Vodafone Spain, owned by Zegona since May, will retain a 10% stake. A third-party financial investor is expected to take on the remaining 40%, though details on the timeline are scarce.
Telefónica’s Historical Partnership Structure
This is not Telefónica’s first foray into fiber partnerships. In Latin America, the company has structured similar deals, such as its agreement last year in Peru with Entel, where it sold a 54% stake in the fiber network to investor, KKR. Other fiber co-investment ventures followed in Chile and Colombia, where KKR holds majority stakes.
The company’s experience in monetizing its fiber assets extends beyond Latin America. In 2022, it sold EUR 1 billion worth of domestic fiber assets in rural Spain to Crédit Agricole Assurances and Vauban Infrastructure Partners, which took a 45% stake in the newly formed business.
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Should this Spanish deal with Vodafone comes to fruition, it will form part of a broader trend in terms of fiber infrastructure partnerships. Vodafone has been involved in similar ventures, such as its joint fiber network with the recently merged MASORANGE, which provides coverage to 11.5 million premises. Similar to the FibreCo deal, MASORANGE and Vodafone are currently seeking a third-party investor to acquire a 40% stake.
As both Telefónica and Vodafone navigate the financial and regulatory complexities ahead, the fiber market in Spain appears set for significant transformation.
