Joint venture sees wholesale fibre network launch in Brazil

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Telefónica Group has reached an agreement with investment group Caisse de dépôt et placement du Québec (CDPQ), to develop an independent wholesale network in Brazil.

The deal will see Telefónica Group and CDPQ each hold 50 per cent of the new company -  FiBrasil - in a co-control governance model. Telefónica’s stake will be held through Telefônica Brasil (Vivo) and Telefónica Infra, the firm’s infrastructure arm, each of which  will have a 25 per cent stake. 

Acting as a neutral wholesale company, FiBrasil will deploy and operate fibre networks in medium-sized cities outside the state of São Paulo, and to market fibre to the home (FTTH) access to all telecommunications providers. The new company starts with a portfolio of 1.6 million Homes Passed (HPs) from Telefônica Brasil, and intends to expand the network to 5.5 million homes in a period of four years. CDPQ is investing up to 1.8bn Brazilian Reals (almost $3.25m) in this joint venture. 

Ángel Vilá, COO at Telefónica Group commented: ‘We are very excited about this opportunity to partner with CDPQ, with whom we share the ambition to accelerate fibre deployment in Brazil, contributing to growth plans of Vivo and for the digital development of the country. We are also very pleased to put our experience in FTTH and commercial capabilities in this partnership, joining forces with CDPQ as a key element for success, strengthening our value proposition and reinforcing our strategy growth.’

Christian Gebara, CEO at Telefônica Brasiladded: ‘Vivo will be FiBrasil's main customer, consolidating itself as the largest convergent operator in the country. The transaction is within our strategic pillars, allowing Vivo to improve its time to market and, at the same time, to have an even more efficient use of financial resources.’

Emmanuel Jaclot, executive vice president and infrastructure Leader at CDPQ concluded: ‘This transaction is an opportunity to further diversify our infrastructure portfolio and demonstrates CDPQ's continued interest in Brazil and the Latin American region, where we see opportunities in a variety of sectors.’

The transaction is subject to regulatory approval and the deal is expected to close in the second quarter of this year. 

Telefónica also recently entered into a $1bn agreement with investment firm KKR to create an open access wholesale company in Chile.

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