Vodafone revises Orange fibre deal as it completes Ono acquisition

Vodafone has completed the acquisition of Spanish cable operator Ono and has revised its fibre-sharing deal with fellow Spanish mobile operator Orange, scaling back a previously stated commitment to build out fibre networks across the country. 

Vodafone’s €7.2 billion acquisition of Ono follows its earlier purchase of Germany’s Kabel Deutschland and confirms its position as a major player in European cable alongside Liberty Global.

“The transaction accelerates Vodafone’s unified communications strategy in a key, highly converged European market, providing a significant time-to-market advantage and network reach that is complementary to Vodafone Spain’s ongoing fibre-to-the-home build programme with Orange,” said Vodafone.

Simultaneously, Vodafone has announced a revised agreement with Orange to co-invest in fibre-to-the-home in Spain. The pair have now said they will collectively build out FTTH networks to two million homes and businesses in total, including 800,000 in 12 cities that have already been passed. Vodafone said the pair would build out to 1.2 million homes in areas where the Ono high-speed fibre network is not present by September next year.

In addition, Vodafone will provide Orange with wholesale access to one million homes on the Ono network, enabling the pair to meet their previously stated commitment to reach three million homes jointly.

The amended agreement also provides a mechanism for Vodafone and Orange to provide each other with wholesale access to future FTTH deployments across Spain on a reciprocal basis.

Vodafone and Orange originally agreed to work together to pass three million homes and businesses this year, with a target of six million by 2017, representing a total investment of €1 billion.

More recently, speaking on Vodafone’s fourth-quarter earnings call in May, CEO Vittorio Colão confirmed that the company’s “programme is to go to three million homes together with Orange plus the Ono thing”.  The revised deal gives Orange security that it will have access to fibre in Spain. Prior to the Ono acquisition the pair had planned to build out 1.5 million homes each to meet their joint commitment.

“Our partnership with Orange Spain complements our acquisition of Ono, ensuring a highly efficient deployment of high-speed broadband and bringing more competition to the Spanish market,” said Philipp Humm, Vodafone’s CEO for Europe.