Telefónica Group and Caisse de dépôt et placement du Québec (CDPQ), a global investment group, announced plans to create a neutral and independent optical fibre wholesale network in Brazil.
FiBrasil Infraestrutura e Fibra Ótica SA ("FiBrasil") will be a 50-50 joint venture with the Telefónica Group's 50% participation held through Telefônica Brazil ("Vivo") and Telefónica Infra, the infrastructure arm of Telefónica Group
Operating as a neutral wholesale company, FiBrasil is set to deploy and operate fibre-optic networks in selected mid-sized cities across Brazil outside the state of Sao Paulo, and to offer FTTH wholesale access to all telecommunications service providers, enabling them to offer these services to their end customers. Starting with a portfolio of 1.6 million Homes Passed ("HPs") contributed by Telefônica Brasil, FiBrasil aims to expand its network to reach around 5.5 million HPs within 4 years, accelerating the transition to fibre and contributing to the country's technological deployment. Telefônica Brasil will also be the anchor tenant for FiBrasil.
CDPQ is investing a total of up to R$1.8 billion (CA$408 million) in this joint venture, comprising both primary and secondary payments. CDPQ's projected capital contributions and the expected leverage to be raised by FiBrasil provide a fully funded business plan to accomplish the company's deployment targets. FiBrasil is set to become a leading operator in the Brazilian fibre space, with the backing of a strong set of shareholders.
Ángel Vilá, Chief Operating Officer at Telefónica Group, commented, "We are very excited about this opportunity to partner with CDPQ, with whom we share the ambition to accelerate fibre roll-out in Brazil, contributing to Vivo's growth plans and to the country's digital development. We are delighted to put our FTTH expertise and commercial capabilities behind this partnership, joining forces with CDPQ as a key element for success, strengthening our value proposition and reinforcing our growth strategy."
"Vivo will be FiBrasil's anchor tenant, consolidating itself as the leading convergent operator in the country. The transaction is framed within our strategic pillars, allowing Vivo to improve time-to-market, while at the same time enabling a more efficient use of funds," said Christian Gebara, Telefônica Brasil's CEO. Gebara also mentioned that "fibre will be a key driver for Vivo's future top-line growth aiming at reaching at least 24 million HPs by the end of 2024, and FiBrasil will be Vivo's platform for expanding coverage to greenfield cities."
