Orange sells half of 2.7b euro fibre unit to fund rural rollout

London

FRENCH telecommunications giant Orange SA is carving out and selling half its interest in a fibre optics operator valued at 2.7 billion euros (S$4.4 billion), the latest in a series of deals by carriers to share the cost of deploying the technology to rural regions.

Caisse des Dépôts, CNP Assurances and EDF Invest will acquire a 50 per cent holding in the fibre optic unit Orange Concessions, according to a statement. Orange will hold a call option that will allow it to regain control and consolidate the unit in the future.

The transaction, expected to close by the end of the year, is aimed at easing the cost of rolling out fibre optic connections to less-populated regions and extracting value from its infrastructure, Orange said. The partnership will be France's leading fibre-to-the-home operator with more than 4.5 million planned or built plug-ins.

Orange chief executive officer Stephane Richard said the accord will allow Orange to win new contracts for networks from local authorities and participate in market consolidation.

The move is the most recent example of fibre deals between French operators and yield-hungry pension funds and infrastructure investors that have been sparked by the government's push to roll out ultra-fast Internet access to a wider swathe of the population.

In November, 2019 Altice NV's mobile infrastructure unit SFR FTTH and a consortium of investors including OMERS, Allianz Capital Partners and AXA Investment Partners paid one billion euros for fibre-network operator Covage. Altice Europe NV is putting some assets on the block following the takeover, Bloomberg News reported this month. BLOOMBERG