The Proximus FTTH strategy evolving from 2016 up to 2021. Presentation and Q&A for the latest session (Fiber Update) available.
20161216: Fiber for Belgium
- FTTH expansion from 2017, currently 6k homes on active fiber in greenfields; recently switched to GPON for brownfields in Brussels; 99% (very) satisfied; pilot in Veurne; FTTO YE 2016: 6100 businesses; plans FTTP expansion from 2017 (currently 6k business FTTO subs)
- Fiber capex EUR 3b in 10 yr; total capex 2017-2019 1b EUR/yr, capex/rev remains <18%, fiber to account for 1/3 of capex by 2019; net debt/EBITDA remains ~1; div stable at 1.50 EUR/share; first in Antwerp, Brussels, Charleroi, Gent, Namen, Roeselare; focus on dense areas that also have many enterprises; target 85% of businesses (p2mp GPON); >50% of homes (p2mp GPON); LT target 100% coverage in urban areas; also Deurne, Hasselt; FTTO: 40% after 3 yr, 65% after 5 yr, >85% after 10 yr; FTTH: 7% after 3 yr, 18% after 5 yr, 40% after 10 yr, >50% after 15 yr; churn down, ARPU up; consumer: regain market share; business: upsell, retaining customers, putting them on a higher value product and enabling adjacent IT solution sales
- Outside cities: no FTTH but average distance to optical node (fiber distribution point) to be reduced to 350 meters (currently 530 meters); FTTC + ultra-vectoring at 17-35 MHz (250 Mbps at 300 meters, 200 Mbps at 400 meters); end-to-end fiber only for enterprises; possibly G.fast for MDUs, but preference for fiber technology: GPON, wall mounting + underground (~50/50), in time decommmission copper
- Short-term opex (maintenance) per customer reduction from fiber 20% (lower power, less real estate, longer equipment lifecycle); also avoid renewal costs of copper; plans opex savings EUR 150m 2015-19 (from the 2015 level), total gross savings EUR 400m; densify mobile network in dense urban areas
- Cost per home EUR 1,000; cost of in-home wiring is included; focus on dense areas, wall-mounting, pre-termination of homes that are passed (~70%; Belgium has relatively few MDUs and few ducts on the distribution side; machinery needs to scale up, targets roll-out speed at peak >4% of total homes per year; capex flattish after 2019: enterprise (more expensive per customer) will go down; consumer becomes more expensive per home; to reduce IT spending from SDN/NFV, standard software solutions; fiber is not regulated; may look into co-investment, however:: "So it’s fully funded by Proximus and we prefer to do it on our own and be the owner of the fiber that we lay in these areas." fiber against Docsis 3.1: speed, symmetry, latency, reliability; house value in the Netherlands increased 3% from FTTH
20200331: Capital Markets Day: #inspire2022
- 4 pillars: 1. accelerate connectivity products & services, 2. digital transformation initiatives to improve NPS, opex CAGR negative 1-2%, remove all legacy IT by 2025, 3. achieve profitable growth by 2022, partnerships (Micosoft Azure), 4. embed sustainability & digital inclusion throughout the organisation
- To launch 5G 200401
- To expand FTTH plan by 800k HP to 2.4m by 2025 (instead of 2030), increases capex to 1.3b EUR/annum until 2025, financed by higher debt (EUR 600m), assets sales (EUR 700m), dividend reduction 20% (to min EUR 1.20 2020-2022), partnerships
- To launch FTTH (1 Gb/s) subscription add-on, 15 EUR/mo
- Establishes Network Business Unit (wholesale)
- Targets 2020: FCF (EBITDA - capex) 780-800m
20201127: JV with EQT Infrastructure V [via Delta Fiber]
- To close 21Q1
- To connect 1.5m premises in medium dense Flanders by 2028 to open FTTP
- To be owned 49.9% by Proximus, EQT 50.1%
- Target 4.2m premises (= 70%) in BE by 2028 remains; interim target 2025 raised 30%
20201208: Fiber in Brussels
- Plans full FTTH coverage (600k HP) in Brussels (Brussels Hoofdstedelijk Gewest) by end 2026
- Partners Actiris, Bruxelles Formation, VDAB Brussel (600 jobs)
- Target 4.2m HP YE 2028 (currently 400k, rollout in 16 cities)
- Plans 50k in Brussels YE 2020, to add 100k/yr from 2022
- Ultimate coverage target BE 70%
20210115: Fiber Update
- Ownership
- Eurofiber JV (0.5m HP in medium dense Wallonia by 2028) to be 50.1% owned by Eurofiber, Proximus 49.9%
- May consolidate EQT and Euriber JVs by acquiring 2 shares; has option to add 10% in EQT Flanders JV
- Blended ownership of Belgian FTTP 76% (80% incl extra 10% in Flanders JV)
- Coverage
- Reached 460k FTTP premises in 16 cities (80 building streams) YE 2020
- New target to 4.2m HP (70%) by 2028
- 100% owned FTTH in dense Flanders & Wallonia 100% of Brussels: 2.2m HP by 2028
- Target >150 building streams in 2021, agreements in place with >30 cities; to add ~600k premises/yr in 2023, 2024, 2025, 2026
- Capex/Opex
- Brownfield costs per HP to be reduced 10% in 2021-23, further 10% in 2024-26
- Partners expertise used for less dense areas
- Plans copper phase-out max 5 yr after fiber launch
- Capex peak in 2022 <EUR 1.3b; JVs save EUR 500m capex 2020-25
- Opex/customer -55%
- Fiber/non-fiber capex to rebalance from 20/80 in 2019 to 40/60 in 2025 on own network
- JV funding: partners equity injections 20-30%, 60-70% from JV debt, remainder (10-15%) from EBITDA
- Technology
- JVs deploy passive AON networks (P2P), allowing unbundling (3rd-party active layer)
- Proximus to build own active layer in 100% owned network
- Commercial
- Adds wholesale services on all FTTH networks
- Speed-based retail pricing, from 100 Mb/s: 350 Mb/s +5 EUR/mo, 500 Mb/s +11 EUR/mo, 1 Gb/s +15 EUR/mo
- Fiber gains Residential: ARPC +10%, gross gains x2; fiber gains Enterprise: churn -25%, data ARPU +22%; migration rate after 3 yr 70%; overall fiber gains: ARPU +EUR 7, churn -25%
- Corporate
- Cumulative FCF 2021-25 unchanged from CMD 200308
- Div policy unaffected: 1.2 EUR/share in 2020-22, return to div coverage in medium term
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