Meet FiBrasil - the new Brazilian wholesale network provider from Telefónica and CDPQ

Meet FiBrasil - the new Brazilian wholesale network provider from Telefónica and CDPQ

Christian Gebara - Telefonica .jpg

Telefónica Group and global investment group, Caisse de dépôt et placement du Québec (CDPQ), have announced they are building a new fibre wholesale network in Brazil.

Named FiBrasil Infraestrutura e Fibra Ótica SA (FiBrasil), the new network will be a neutral and independent optical fibre backbone to be jointly built and operated between the two companies.

Upon completion, Telefónica Group and CDPQ will each hold 50% in FiBrasil using a co-control governance model. Telefónica Group's 50% stake will be held through Telefônica Brazil (Vivo) and Telefónica Infra, the company’s infrastructure unit, each holding a stake of 25%.

"We are very excited about this opportunity to partner with CDPQ, with whom we share the ambition to accelerate fibre roll-out in Brazil, contributing to Vivo's growth plans and to the country's digital development,” said Ángel Vilá, chief operating officer at Telefónica Group.

“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."

Once live, FiBrasil will deploy and operate fibre-optic networks in select cities across Brazil outside of Sao Paulo, and to offer fibre-to-the-home (FTTH) wholesale access to all service providers.

Starting with a portfolio of 1.6 million homes passed through Telefônica Brasil, FiBrasil aims reach 5.5 million homes passed within 4 years.

CDPQ is investing approximately R$1.8 billion ($315 million) in this joint venture, which will provide a fully funded business plan to meet the company's deployment targets.

“CDPQ is thrilled to establish a joint venture with Telefónica, 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,” added Emmanuel Jaclot, executive vice-president and head of infrastructure, CDPQ.

“This transaction is an opportunity to further diversify our infrastructure portfolio and demonstrates CDPQ's ongoing interest for Brazil and the wider Latin America region, where we see opportunities in a variety of sectors."

CDPQ’s strong investment capacity and experience in managing infrastructure investments along with Telefónica’s technical capabilities and experience in deploying and operating fibre networks will create strong synergies for this new venture. In addition, FiBrasil will benefit from Vivo's as its anchor client.

"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 (pictured), Telefônica Brasil's CEO.

"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."

The transaction is due to close in Q2 of 2021, subject to regulatory approval.

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