Telefonica and CDPQ create FiBrasil and plan to reach 5.5 million FTTH HPs in 4 years

Telefonica Group and global investment group Caisse de dépôt et placement du Québec (CDPQ), headquartered in Quebec, Canada, have officially announced this last Tuesday, March 2nd that they have run an agreement to build, operate and develop a natural and independent optical fibre wholesale network in Brazil, which is called ‘FiBrasil Infraestrutura e Fibra Ótica SA’ (FiBrasil).

According to the information that was reported, once the transaction is completed, Telefonica Group and CDPQ will each hold 50% in FiBrasil under a co-control agreement. Telefonica Group’s 50% participation will be held through Telefônica Brasil (‘Vivo’) and Telefónica Infra, each holding a 25% stake. It is expected for the transaction to be approved and completed by Q2 2021. 

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. As reported from Telefonica, FiBrasil aims to expand its network to reach around 5.5 million HPs within 4 years. CDPQ is investing a total of up to R$1.8 billion (CA$408 million) in this joint venture. As reported by Telefonica, deployment plan is ‘fully financed through CDPQ’s investment and new debt expected to be raised by FiBrasil’

‘We are very excited about this opportunity to partner with CDPQ, with whom we share the ambition to accelerate fibre deployment 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’, reported Angel Vila, Chief Operating Officer at Telefonica Group. In addition, Cristian Gebara, CEO at Telefonica Brazil, said 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’. 

From CDPQ they have also expressed themselves on the new partnership with Telefonica through Emmanuel Jaclot, the company’s EVP and Head of Infrastructure.  ‘CDPQ is thrilled to establish a joint venture with Telefpnica, one of the world’s leading telecommunications service providers, to accelerate the delivery of next-generation fibre optic infrastructure to over 5 million Brazilian homes. This transaction is an opportunity to further diversify our infrastructure portfolio and demonstrate CDPQ’s ongoing interest for Brazil and the wider Latin America region, where we see opportunities in a variety of sectors’, the executive reported.