Deutsche Telekom and the IFM Global Infrastructure Fund are teaming up for a new approach to the rural FTTH problem. The German incumbent and the infrastructure fund are founding a new joint venture that will target more rural homes and communities around the country.
The JV is called Glasfaser Plus GmbH and will begin operations in 2022. The intent is to build out gigabit-capable fiber to as many as 4 million homes between 2022 and 2028. It will build out its infrastructure under an "open access" model, with DT signing on as the first wholesale customer when the deal closes.
IMF GIF has put in €900M to acquire a 50% stake in the company, investing in the long term cash flow generation that the buildout will hopefully generate. IFM says it plans to invest €30B by the end of this decade on fiber projects alone, with this being their first such investment in Europe.
The rationale behind such a JV is that infrastructure funds are looking for longer term, safer cash flow opportunities than telecommunications and internet infrastructure providers themselves. Thus while such rural FTTH projects are lower on the list for someone like DT they are still on the list, and they represent an opportunity to someone like IFM to swoop in with a targeted investment. This sort of arrangement does seem to be catching on.
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