Telefónica, CDPQ to create FiBrasil for fiber wholesale provision in Brazil

March 8, 2021
FiBrasil will offer wholesale fiber-optic network access in “selected mid-size cities.” Available infrastructure will include wholesale FTTH access, which will include an existing portfolio of 1.6 million homes past contributed by Telefónica Brasil.

The Telefónica Group says it has agreed to partner with global investment group Caisse de dépôt et placement du Québec (CDPQ) to create FiBrasil Infraestrutura e Fibra Ótica SA. FiBrasil will offer neutral fiber wholesale services leveraging new fiber infrastructure that will be built across the country – with the exception of the state of Sao Paulo – for the purpose.

FiBrasil will offer wholesale fiber-optic network access in “selected mid-size cities.” Available infrastructure will include wholesale fiber-to-the-home (FTTH) access, which will include an existing portfolio of 1.6 million homes past contributed by Telefónica Brasil. FiBrasil will expand this footprint to approximately 5.5 million homes passed within four years, Telefónica said.

The transaction that supports the creation of FiBrasil is expected to close in the second quarter of 2021 and is subject to regulatory approval. Assuming the deal closes as envisioned, the Telefónica Group and CDPQ will each hold 50% of FiBrasil with equal control. Telefónica’s stake will be split evenly between Telefónica Brasil (Vivo) and Telefónica Infra, the group’s infrastructure branch. CDPQ will pay a total of up to 1.8 billion reais ($310 million) for its share in the joint venture, including both primary and secondary payments.

"We are very excited about the opportunity to partner with CDPQ, with whom we share the ambition to accelerate the deployment of fiber in Brazil, contributing to Vivo's growth plans and the digital development of the country. We are delighted to put our FTTH experience and commercial capabilities at the service of this joint venture, joining forces with CDPQ as a key element for its success, strengthening our value proposition and reinforcing our growth strategy," commented Ángel Vilá, CEO of the Telefónica Group.

"CDPQ is delighted to establish a joint venture with Telefónica, one of the world's leading telecommunications service providers, to accelerate the delivery of the next generation fiber-optic infrastructure to more than 5 million Brazilian households,” added Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ. “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."

"Vivo will be FiBrasil's anchor client, consolidating itself as or the leading convergent operator in the country,” according to Christian Gebara, CEO of Telefônica Brazil. “The transaction is part of our strategic pillars, allowing Vivo to improve time-to-market and, at the same time, a more efficient use of funds." Gebara added that Telefônica Brazil hopes its FTTH network will pass at least 24 million homes by the end of 2024, with FiBrasil as Vivo's platform to expand coverage into new cities.

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