Vodafone Deutschland’s ambitious plan to expand Germany’s fibre-optic infrastructure is facing a major hurdle. This comes as its key partner, Altice, considers selling its stake in their joint venture, OXG. This potential exit could significantly impact Vodafone’s strategy to connect seven million households with high-speed broadband over the next seven years.
German newspaper Handelsblatt, citing sources familiar with the negotiations, reports that Altice has begun exploring potential buyers for its share in OXG. While Vodafone hasn't confirmed these reports, it stated that any sale would require its approval. A company spokesperson emphasized that OXG remains financially stable, boasting a €4.6 billion credit line to ensure investment continuity for the next six years.
The spokesperson also noted that Vodafone has already initiated fibre-optic deployments in 21 cities. However, this falls considerably short of the original target of 150 cities and municipalities by the end of 2024. Should Altice proceed with its exit, Vodafone could face further disruptions to its expansion plans.
Altice’s recent reputation challenges, including corruption and money laundering allegations against several top executives, have prompted the company to divest multiple assets. However, finding a buyer for its OXG stake might prove difficult. Industry insiders suggest that rising interest rates and increasing construction costs have decreased the attractiveness of fibre-optic investments.
A recent AlixPartners study predicts that, within the next two years, approximately two-thirds of fibre-optic projects in Germany will require additional financing. In this uncertain climate, Altice’s potential withdrawal poses a substantial risk to Vodafone’s fibre strategy. For Vodafone Deutschland CEO Marcel de Groot, maintaining the company’s competitive position in the broadband sector necessitates decisive action to navigate this looming industry shake-up.