KPN buys fibre network
KPN has announced the acquisition of a fibre network covering some major urban centres, a move that will help accelerate growth of its already broad footprint.
The Dutch incumbent said it will buy Primevest Capital Partners’ fibre infrastructure, but declined to share how much it will pay for the privilege. It’s probably not a massive deal, given that the network covers just 127,000 homes, but given that the seller is a Netherlands-based investment firm, there is doubtless some sort of return baked into the T&Cs.
In addition, the homes covered by the network – located in urban areas in in The Hague, Rotterdam and Eindhoven – will serve as a useful element of KPN’s ongoing fibre rollout plan, presuming the deal closes as expected by the end of the month.
“The acquisition of Primevest’s fibre network is a welcome addition to our existing fibre footprint, which totals 4 million households,” said Wouter Stammeijer, Chief Technology & Digital Officer at KPN. “We’ve been making strong progress with our fibre rollout, which is at the heart of our strategy. In the next few years we will be fully focused to complete this project.”
KPN’s overarching goal is to cover 80% of the Netherlands with fibre by 2026, both under its own steam and via partnerships. Thus far, things are going pretty well.
During the first quarter of this year alone the operator added 85,000 households to its own fibre footprint, and activated 46,000, which is a good result both from a build point of view and in terms of uptake. It also rolled out fibre to 30,000 homes through partnerships, including 27,000 via its Glaspoort venture.
Glaspoort is the name KPN gave to the fibre joint venture it created with pension fund APG a couple of years ago. The partners outlined plans to spend €1.2 billion on a wholesale network, with KPN as the anchor tenant, covering around 910,000 premises in underserved areas. However, they have since upped their target a number of times and are now looking to reach 1.2 million homes and businesses.
By the end of Q1 Glaspoort’s footprint was at 340,000 premises. Last month the venture announced T-Mobile Netherlands as its latest major service provider customer, and back in May got the required regulatory approvals for a plan to take a 50% stake in GlasDraad, a fibre builder owned by Belgian infrastructure investor TINC; that deal gives it an option to take over the whole of GlasDraad in due course.
Essentially, the JV seems to be working well. And at the same time, KPN is pushing on with its own fibre rollout. Its own footprint covered 3.8 million homes by the end of March, of which 1.9 million had taken up a fibre service; that amounts to a take-up rate of 50%, which is a decent result. Overall, including its various partnerships, KPN’s fibre footprint covers 4.28 million homes.
High fibre uptake means KPN has been able to start decommissioning its copper network in certain areas; specifically, in areas covering 1.2 million connections as of Q1. Naturally, it plans to push on with the switch-off in areas where fibre is available.
“Over time this results in significant quality improvements and spend savings related to the closure of technical buildings, reduced service tickets and maintenance costs, and lower energy consumption,” it noted in its Q1 report.
Deals like the Primevest network acquisition can only help it to realise those benefits.
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