First of its kind: Telefónica wins fiber deals with itself in Germany and Brazil

fiber businesses

Telefónica has been mucking about with its fiber businesses in a bid to stay in the market in a more cost-effective way.

After searching the market for a partner regarding fiber rollout in Germany, the Spanish multinational telco was excited to announce that the first customer on its Unsere Grüne Glasfaser (UGG) wholesale network, will be itself.

That is not surprising information, however, it seems Telefónica is hitting the ground running in the German fiber market.

Fiber rollout plan

As part of the fiber business, UGG will start rolling out fiber at the beginning of March, Telefónica revealed. Its first location will be the municipality of Maring-Noviand in the Rhineland-Palatinate.

It explained that around 775 households, comprising 1,500 inhabitants in the Moselle wine growing region will benefit from fiber expansion.

Telefónica noted that “Nearby Hermeskeil will be connected in the second wave, as will Baden-Württemberg towns of Malterdingen, Aach and Volkertshausen.”

The firm added, “Customers will be offered its ‘O2 my Home’ tariff,” without specifying at what point it expects to be able to provide retail services on the network.

On the other hand, the partnership with Allianz in German is one Telefónica plans to replicate as it rolls out fiber in markets outside of Spain. At the telco’s results presentation last week chief operating officer Angel Vila Boix said it will follow a similar pattern in Brazil, where it is looking for partners for its FiBrazil venture.

FiBrazil is being carved out of Telefónica’s Vivo unit in Brazil and therefore already has a fiber-to-the-home (FTTH) network covering 1.6 million premises, but with one or more partnership deals in place it aims to pass 5.5 million premises in the next four years. It will roll out a wholesale FTTH network in selected mid-sized cities across Brazil outside the state of Sao Paulo.

Canadian pension

Telefónica this week brokered a deal with Caisse de dépôt et placement du Québec (CDPQ) that will see the Canadian pension fund take a 50 percent stake in FiBrazil, with Telefónica holding the remainder, split between its Telefónica Brazil and Telefónica Infra units. CDPQ will invest up to R$1.8 billion (around $320 million) in the venture via both primary and secondary payments.

“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, CEO of Telefônica Brazil.