Deutsche Telekom is seeking investors in a company it is creating to expand the fibre network in Germany, Reuters reports, citing sources familiar with the plans. Telekom is also speeding up the sale of T-Mobile Netherlands to cut its debt and free up cash for investment in infrastructure, it added.
The company wants to explore with Deutsche Bank whether Dutch pension funds APG and PGGM, Canada's Brookfield and CDPQ, as well as sovereign wealth funds are interested in investing in the new company. Investors would receive stakes equal to half of the share capital in the new firm, the report added. Deutsche Telekom plans to provide fibre access to an initial 4 million German households through the joint venture.
Telekom is also speeding up the sale of T-Mobile Netherlands in order to reduce its debt, currently approximately EUR 130 billion, and free up capital for the roll-out of the fibre network in Germany. At its capital markets day in May, Deutsche Telekom indicated that it wanted to divest T-Mobile Netherlands. Telekom's chief executive office Tim Hoettges also underlined the company's commitment to accelerating the roll-out of fibre in Germany to 2.5 million homes per year by 2024.
For the fibre deployment, Deutsche Telekom has opted to follow the same path as T-Mobile and KPN in the Netherlands. T-Mobile is partnering with Primevest and a consortium with KKR and Deutsche Telekom Capital Partners (DTCP Infra) for the Dutch fibre roll-out. In March, KPN announced a joint venture with APG, aiming to connect 750,000 households in 1,000 smaller cities in the Netherlands.
According to Reuters, Deutsche Telekom has engaged Morgan Stanley to accelerate the sale of T-Mobile Netherlands. Morgan Stanley is said to have already distributed information packages to potential interested takeover candidates. Bids for T-Mobile Netherlands are expected at the end of July. The sale of T-Mobile Netherlands is expected to yield between EUR 5 billion and EUR 6 billion.
