Brazilian fibre wholesale network deal is confirmed

Brazilian fibre wholesale network deal is confirmed

Following yesterday’s news of a potential agreement to set up a new fibre optic broadband wholesaler in Brazil, this deal has now been confirmed.

Telefónica Group, a major international operator, and Caisse de dépôt et placement du Québec (CDPQ), a global investment group, have reached an agreement for the construction, development and operation of a neutral and independent optical fibre wholesale network in Brazil. It will be called Infraestrutura e Fibra Ótica SA (or FiBrasil).

Telefónica Group and CDPQ will each hold 50 percent in FiBrasil, although Telefónica Group's participation will be held through Telefônica Brazil (Vivo) and Telefónica Infra, the infrastructure arm of Telefónica Group, each of which will hold a stake of 25 percent.

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 fibre-to-the-home (FTTH) wholesale access to all telecommunications service providers, enabling them to offer these services to their end customers.

This is clearly a major initiative, a fact underlined by the amount of money that is going into it. CDPQ, one of the world's largest global institutional investors in infrastructure, is investing a total of up to R$1.8 billion  (about $315.7 million) in this joint venture.

It will start with a portfolio of 1.6 million homes passed (HPs) contributed by Telefônica Brasil, but FiBrasil aims to expand its network to reach around 5.5 million HPs within four years. However, this may be part of an even bigger coverage drive. Christian Gebara, Telefônica Brasil's CEO, said: “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."

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