Open Fiber: 13.5 million real estate units covered by FTTH

Open Fiber concluded the fifth year of operation by registering over 13.5 million real estate units covered (+ 23% compared to 2020) in FTTH, practically becoming one of the leading operators in the fiber sector in Europe. This is one of the figures that emerges from the financial statements and the 2021 annual financial report approved yesterday by the Board of Directors, chaired by Barbara Marinali. It should be remembered that today the company is controlled by 60% from Cassa Depositi e Prestiti (CDP) and 40% from the Macquarie Fund.

POSITIVE BALANCE

Open Fiber has confirmed growing numbers for 2021, both in terms of revenues and in terms of margins. “Revenues amounted to around 380 million euros, up (+ 45%) compared to around 261 million at the end of 2020“, the document reads.”EBITDA shows growth of 92%, from around 79 million euros in 2020 to around 152 million. Positive trend also for margins, which rose from 30% to 40%. The net financial position amounts to -3.3 billion euros, while investments made during the year amounted to over 1.3 billion euros“. The Board also approved the 2021 Sustainability Report, the document which for the second year of publication describes the commitment of Open Fiber in the field of sustainability.

THE DEVELOPMENT OF THE NETWORK

Over the past four years, Open Fiber has invested around € 1 billion per year to carry out his FTTH coverage project. As is well known, the company obtained a loan of approximately € 7.2 billion from a pool of Italian and international banks, which can be extended for a further 2.8 billion.

Open Fiber’s industrial plan, unveiled in December, provides for the coverage of 24 million real estate units in all regions. The latest official data is updated as of December 31, 2021: the marketing of services is present in 219 large and medium-sized cities (black areas) and 3,230 small municipalities (white areas, where OF operates as a public concessionaire).

Confirming the validity of the wholesale only business model, around 300 operators in the telecommunications, broadcasting, energy and e-learning sectors have chosen Open Fiber as the main supplier of infrastructure and services.i “, points out Open Fiber.

Open Fiber is a sustainable company due to the intrinsic nature and socio-economic impacts of its business. In a complex global context, thanks to the support of shareholders and the financial system, including the international one, we are working to complete a key infrastructure for families and businesses. We are strongly committed to completing and speeding up coverage of the whole country with an ultra-broadband infrastructure, giving priority to the white areas where the digital gap is mostly discounted. With these objectives, at the service of the recently approved industrial plan, we will implement 11 billion in additional investments – Mario Rossetti, CEO of Open Fiber

In fact, since 2017 Open Fiber has contributed to the increase in FTTH coverage in the country, which according to the latest DESI report has now reached 34% of households – the EU average is 42.5%. In particular, with over 1.6 million lines activated on its network in September 2021 (last AGCOM Observatory), Open Fiber’s FTTH represented over 68% of the Italian market.

UNIQUE NETWORK WITH TIM?

The single network theme is postponed to June, after the funds for the gray areas will be allocated: 3.8 billion euros made available by the PNRR to wire about 7 million house numbers. TIM and Open Fiber will participate in the calls but cannot sign any agreement beforehand, not even a memorandum of understanding, in order not to risk making the assignment null and void. On the other hand, if for the white areas the antitrust approach is milder, in the gray areas everything is more complicated since at least one operator is always on site. Proof of this is that it should be announced shortly a commercial agreement which should finally allow Open Fiber to use the ducts and some infrastructures of TIM present in the areas of market failure. There is talk of a long-term rent.

And what about the merger plan? In principle, the strategy of the previous CEO Luigi Gubitosi has been archived and in the face of the new shareholding structures, the creation of a single network seems more feasible. CDP holds a key position, which holds 60% of Open Fiber (the remaining 40% is owned by Macquarie) and approximately 10% by Telecom Italia, while the secondary network of TIM merged into Fibercop is controlled for 58% by TIM, for 37.5% from the KKR fund and the remainder from Fastweb. At the same time, the new TIM CEO Pietro Labriola made write-downs in the balance sheet of 8.7 billion and is reorganizing the business units for the large company while the KKR fund has proposed a takeover bid (OPA) for Telecom.

The epilogue is not clear but we must keep in mind (at least) three elements. The first is that the antitrust action is predictable, it is never a leap in the dark. The second is that the EU Antitrust provides a definitive and official opinion in 18/24 months. Third: the more time passes, the more coverage increases and the less convenient it becomes to create a single network.


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