TelecomTV TelecomTV
  • News
  • Videos
  • Channels
  • Events
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • Open RAN
  • Digital Platforms and Services
  • 5G
  • Access Evolution
  • Private Networks
  • Cloud Native
  • Edge
  • Open Networking
  • Sustainability
  • AI, Analytics and Automation
  • 6G Research and Innovation
  • Security
  • More Topics
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • |
  • About
  • Contact
  • |
  • Connect with us
  • 5G
  • 6G Research and Innovation
  • Access Evolution
  • AI, Analytics and Automation
  • Cloud Native
  • Digital Platforms and Services
  • Edge
  • Open Networking
  • Open RAN
  • Private Networks
  • Security
  • Sustainability
  • Connect with TelecomTV
  • About
  • Privacy
  • Help
  • Contact
  • Sign In Register Subscribe
    • Subscribe
    • Sign In
    • Register
  • Search

FTTx

FTTx

Fibre-to-the-bank-account: Altice's Portugal deal is all about the money

Mary Lennighan
By Mary Lennighan

Dec 17, 2019

via Flickr © Hernán Piñera (CC BY-SA 2.0)

via Flickr © Hernán Piñera (CC BY-SA 2.0)

  • Telecoms group brokers FTTH deal with Morgan Stanley
  • Talks up benefits of national fibre wholesaler
  • But the deal is really about deleveraging
  • Fibre is the new towers, analysts note

Altice is keen to point out that the separation and sale of its fibre assets in Portugal will benefit the country's telecoms market and broader economy, but make no mistake, this deal is not about technology or even business strategy: it is purely financially motivated.

The telecoms and cable group is spinning off its Portuguese fibre-to-the-home (FTTH) business into a dedicated wholesale vehicle and has brokered a deal to sell just shy of 50% of the business to Morgan Stanley Infrastructure Partners via a multi-billion-euro transaction.

Meo, the fixed and mobile operator formerly known as Portugal Telecom and owned by Altice, will sell 49.99% of Altice Portugal FTTH to Morgan Stanley Infrastructure Partners in a deal that values the whole company at €4.63 billion. That figure represents and EBITDA multiple of 20x. Altice will receive €1.565 billion next year and two further instalments of €375 million in December 2021 and December 2026, subject to certain performance metrics.

The deal is slated to close in the first half of next year.

It comes as Altice pushes on with its deleveraging plan, following a series of sizeable debt-fuelled acquisitions that gave the group its current structure.

The deal is also part of a broader market trend.

As Deutsche Bank analysts put it "this confirms our view that 'fibre (as an asset class) is the new towers.'"

It certainly looks that way for Altice, which closed the sale of a 75% stake in its newly-formed Portuguese towers company to a consortium including Morgan Stanley Infrastructure Partners and Horizon Equity Partners in September 2018, three months after it announced that KKR would acquire a 49.99% stake in its French towers portfolio. And of course many telcos have brokered towers deals in recent years. Vodafone, for example, is working on the creation of TowerCo, an independent vehicle for its European towers that is due to be operational by May 2020.

Like towers, fibre networks offer the kind of infrastructure reliability and returns that investors are keen to tap into at present, as well as offering telecoms operators a significant monetisation opportunity.

Altice has already proven that. This time last year it sold a 49.99% stake in French infrastructure wholesaler SFR FTTH to a trio of investment firms – Allianz Capital, AXA IM–Real Assets, and Omers – for €1.8 billion, implying an enterprise value of €3.6 billion for the business as a whole, which represented a 20x EBITDA multiple. At the time, TelecomTV described that deal as "a sign of the way the wind is blowing for the telecoms space in Europe."

That was certainly true as far as Altice is concerned.

"Following this transaction, Altice Europe has obtained cash proceeds in excess of €5.7 billion through the transformational SFR FTTH transaction and the various tower sales and partnerships announced in 2018," Altice founder Patrick Drahi said late last week.

Altice notes that Meo is first incumbent in Europe to separate its fibre business into a dedicated wholesale vehicle – it pledges to sell wholesale services to all operators at the same financial terms – and is pitching itself as "the only truly nationwide fibre wholesaler in Europe." While that last point might be up for debate – Open Fiber is rolling out FTTH across Italy, for example – Altice is certainly in the vanguard.

But presuming fibre really is the new towers, there will be more similar deals to come.

Related Topics
  • Access Evolution,
  • Analysis & Opinion,
  • Announcement,
  • Business Models,
  • Europe,
  • FTTx,
  • News,
  • Telco & CSP

More Like This

Access Evolution

What’s up with… GSMA, Verizon, Semtech

Aug 3, 2022

Access Evolution

Verizon quadruples capacity in fiber network core

Aug 3, 2022

Access Evolution

Broadband access market set to boom in 2026

Jul 29, 2022

Access Evolution

What’s up with… Liberty Global and Telefónica, Orange and VOO, smartphones

Jul 29, 2022

Access Evolution

Orange ups Tour de France connectivity to meet increased demand

Jul 29, 2022

Email Newsletters

Stay up to date with the latest industry developments: sign up to receive TelecomTV's top news and videos plus exclusive subscriber-only content direct to your inbox – including our daily news briefing and weekly wrap.

Subscribe

Top Picks

Highlights of our content from across TelecomTV today

0:46

The Cloud Native Telco Summit returns this September!

8:32

Azita Arvani on Being a Female Leader at Rakuten Symphony

16:19

AT&T Amy Zwarico on securing telco applications in the public cloud

1:44

Join us for the greatest industry debate of the year!

TelecomTV
Company
  • About Us
  • Media Kit
  • Contact Us
Our Brands
  • DSP Leaders World Forum
  • Great Telco Debate
  • TelecomTV Events
Get In Touch
[email protected]
+44 (0) 207 448 1070
Connect With Us
  • Privacy
  • Cookies
  • Terms of Use
  • Legal Notices
  • Help

TelecomTV is produced by the team at Decisive Media.

© Decisive Media Limited 2022. All rights reserved. All brands and products are the trademarks of their respective holder(s).