KPN establishes an FTTP JV with APG (presentation).
In the self-financing scenario, they would reach 65% coverage by 2026. That now rises to 80%, with a commitment to go to 100% thereafter. New too is the inclusion of business parks and the off-balance sheet character.
Note: we recently hinted at this option ('Plan B')in a Deep Dive on KPN (Feb. 18), after examples set by TIM, Proximus and Orange.
The details:
- Establishes 50/50 JV with APG, which contributes EUR 440m cash o/w half initially, half in installments
- Equity value EUR 880m = 970 EUR/line
- Total expected capex EUR 1.2b o/w 70% debt financed
- To pay dividends when CF positive (from year 5)
- Almost all financing and construction capacity secured
- To launch 21Q2
- To not be consolidated; option on 1 additional share to consolidate and control
- To roll-out 910k FTTP lines in medium dense areas (1,000 villages) & business parks (long tail): 685k homes, 225k businesses by 2026
- Brings FTTH coverage (KPN + JV) to 80% (6.5m lines) by 2026 (comes on top of existing plans for 2.5m new lines by YE 2026m from 2.8m today)
- To finalise roll-out after 2026
- Network to provide wholesale services, KPN anchor tenant and builds & operates active layer and provides wholesale services
Questions remains
- Since it's medium dense areas, will they use AON (point-to-point active ethernet), just as Proximus is doing in its JVs with Delta Fiber and Eurofiber? Or go with the (new) PON strategy after all?
- What exactly does finalising mean? How close to 100% will it come?
- Is there a further option to buy out APG altogether?
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