T-Mobile Netherlands has found a new partner to expand its FTTH services. Its parent company Deutsche Telekom is partnering with investment group KKR on a new joint venture to roll out fibre infrastructure in the Netherlands. Deutsche Telekom Capital Partners will be the minority shareholder and KKR hold a majority stake in the company Open Dutch Fiber, while T-Mobile serves as the anchor tenant.
Open Dutch Fiber will be an independent wholesale operator open to any service provider. It will target roll-out in urban and higher population density areas, connecting homes and businesses to the the fibre network. The company aims to start operations in Q2 with an initial EUR 700 million capital expenditure and the first construction agreements already in place. The target is to connect at least 1 million premises by 2025.
T-Mobile already has a similar agreement with the company Primevest Capital, which is covering parts of Rotterdam, The Hague and Eindhoven with a new FTTH network. T-Mobile said in February it was in talks with a new investor on expanding the network footprint and has now signed a 20-year agreement with the new operator.
Open Dutch Fiber will be led by experienced management. Jordi Nieuwenhuis and Uwe Nickl, the former co-CEOs of Deutsche Glasfaser, will lead the company. Nieuwenhuis previously co-founded Reggefiber, the first major FTTH operator in the Netherlands which was later acquired by KPN. They will be supported by CEO Michael Griffioen, who will oversee the company’s day-to-day operations and to date has led T-Mobile's FTTH business.
Further financial details of the venture were not disclosed. KKR is investing through its Global Infrastructure Investors Funds. It also brings significant experience in the fibre market, following investments such as Deutsche Glasfaser in Germany, Hyperoptic in the UK and FiberCop in Italy.
Open Dutch Fiber plans to use AON technology (active Ethernet over point-to-point connections), rather than the PON system being adopted by the dominant Dutch fibre operator, KPN. The two companies are likely to overlap in their target areas, as KPN is also focusing on cities to expand its network quickly with over 500,000 connections this year and next.
The company will seek to avoid duplication with KPN, given the significant building costs and need for high network penetration, Nieuwenhuis told Telecompaper. T-Mobile CEO Soren Abildgaard said the estimated costs of around EUR 700 per connection are roughly in line with what the operator's other partner Primevest is spending. They are seeking at least a 20 percent network penetration, he added.
ODF will manage both the active and wholesale layers of the new network. In T-Mobile's cooperation with Primevest, the latter acts as investor and owner of the passive network, while T-Mobile manages the wholesale and retails services.
