Liberty Global returns to Germany. Just two years after the telecom group sold its German cable subsidiary Unitymedia to Vodafone, it would like to invest in new fiber optic connections. The vehicle for this is a new joint venture with the financial investor InfraVia Capital Partners.
InfraVia and Liberty Global Ventures, the investment arm of the Liberty Group, will each hold 50 percent of the shares. The aim is to lay fiber-to-the-home (FTTH), i.e. fiber optic connections, directly to the end customer. InfraVia brings the money from its own infrastructure fund as well as experience with investing in digital infrastructure. Liberty Global is an experienced operator of Internet connections and knows the German market and the necessary administrative channels well, after all, Unitymedia was part of Liberty Global for a decade. In 2019, Vodafone was allowed to take over Unitymedia, which had 7.2 million customers at the time.
The new joint venture is called Liberty Networks Germany and should approach it cautiously. In the first phase, the new optical fibers will only be laid in a “small number of municipalities”. Those involved have not yet revealed which communities these are. Liberty Networks Germany would only like to expand its investments in the Federal Republic if these undertakings meet certain criteria for success.
For underserved areas
Liberty Global did not want to give details in an interview with heise online. In any case, the joint venture will focus on places where there are currently no fiber optic or cable connections. The start of construction work depends in particular on the necessary official permits.
Robert Dunn, an investment manager at Liberty Global, is hoping for “attractive returns from new fiber optic networks in a country where millions of households do not yet have access to fast, reliable broadband connections.” At the same time, he underlines the cautious access to the German market – a billion dollar fire like in the times of the dot-com bubble is expressly not planned. Dunn is supposed to play an important role in the Germany project. It is still open exactly what that will be.
Industry expects German fiber optic boom
The industry association FTTH Council Europe expects vigorous growth in fiber optic access networks in Germany. A current report by the organization estimates that fiber optic networks will bypass nine million German households this year. In five years this should almost quadruple to 33 million. This would make Germany the second largest fiber optic market in Europe after Russia in terms of potentially connectable households in 2026.
The number of households actually connected with FTTH will increase sevenfold over the next few years from currently 3.5 million to 25.5 million. After Russia and France, Germany would then have the most fiber optic households of all European countries, measured in absolute numbers.
For Great Britain and Northern Ireland only, the Studie des FTTH Council Europe steeper growth in both statistics. Liberty Global has entered into a joint venture with O2 there. It’s called Virgin Media O2 and already operates a cable network. This is to be completely upgraded to fiber optics over the next seven years.