EQT Infrastructure and OMERS Infrastructure announced today that they are acquiring Deutsche Glasfaser, the fastest growing provider of gigabit fiber-to-the-home (FTTH) connections, with more than 600,000 connected households and 5,000 corporate customers across Germany.
Deutsche Glasfaser will be merged with inexio, which is part of EQT Infrastructure’s existing portfolio. EQT Infrastructure will hold 51% and OMERS 49% of the combined group.
Over the next few years, the Group intends to invest more than EUR 7 billion in the expansion of high-speed Internet infrastructure in Germany and thus make a sustainable contribution to the German government’s goal of providing gigabit-capable infrastructure across the country by 2025.
The transaction is still subject to antitrust approval and is expected to be completed in the second quarter of 2020, according to the companies.
BREKO expressly welcomes the takeover of Deutsche Glasfaser by the infrastructure investors EQT and OMERS and the resulting merger of the companies Deutsche Glasfaser and inexio to form a leading fiber optic group in Germany.
“The signs for the expansion of the digital infrastructure in Germany are clearly pointing to fiber optics,” explains BREKO Managing Director Dr. Stephan Albers. Over the next few years, the new group intends to invest more than EUR 7 billion in the expansion of fiber optics to the buildings and homes of more than 6 million households. “The investment by EQT and OMER and the merger of our member companies Deutsche Glasfaser and inexio will give a huge boost to fiber optic expansion in Germany and thus also to Germany as a business location. A genuine ‘fiber optic factory 4.0’ is being created here with open access as a built-in catalyst for even faster fiber optic expansion in Germany.”
The current example of Deutsche Glasfaser and inexio, but also the entry of financial investors in a number of smaller, medium-sized telecommunications companies such as BBV, götel, GVG Glasfaser or Titan Networks as well as the major project “Glasfaser Nordwest” (joint venture of Deutsche Telekom and EWE) clearly shows that there is sufficient capital available in the telecommunications market to bring fiber optic expansion to citizens and companies.
BREKO Managing Director Albers therefore also warns with regard to the German government’s efforts to intervene in the functioning market through significantly expanded state funding programs (the so-called “grey areas funding”): “Money alone does not build fiber optic networks. State funding with a ‘watering can’ and without a clear prioritization in favor of particularly poorly supplied areas will not accelerate the expansion of fiber optics, but rather slow it down, as the already scarce civil engineering and planning capacities will be tied up in funding projects and will then no longer be available for private-sector expansion. The telecommunications companies want to and will realize the major part of the expansion themselves. BREKO member companies are aware of their responsibility for Germany’s digital future and will make a significant contribution to this by expanding fiber optics in cities and municipalities.”
Albers concludes: “In addition to a clear priority for self-economic expansion and supplementary moderate funding, we need less bureaucracy in the form of faster and simpler approval procedures and the acceptance of alternative installation methods.”