Wind Hellas spins off €70 billion fibre business

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Making the AltNet numbers add up

Wind Hellas has unveiled plans to divest its fiber broadband assets into a new company to operate as an open access fiber wholesaler.

The Greek mobile operator is transferring its fiber business to a device known as Hellenic Openfiber, including physical infrastructure such as channels and locations, the fiber cables themselves and active equipment, although Wind will retain the part of the active equipment that serves its mobile business. In total, Hellenic Openfiber takes over 3,379 km of fiber network, of which 595 km are still to be built, and 170 km owned by the public electricity company and leased exclusively to Wind.

Deloitte, which prepared an appraisal report for Wind Hellas this summer, estimates the value of the new fiber unit at an estimated 69.9 million euros, including assets worth just over 54 million euros. Its revenue for this year will be around € 19.2 million and earnings € 7.8 million.

Wind will of course remain a customer of Hellenic Openfiber, whose goal will presumably be to attract other retail ISPs, potentially including incumbent Cosmote, Vodafone and newcomer Inalan.

Fiber network transactions are fast becoming the norm in the telecommunications field as operators seek to monetize assets and / or brokerage deals with investment partners to help share the financial burden as well as the return.

At the moment, there is no question of Wind selling the new business – in whole or in part – but it’s hard to believe that such an initiative will not get on the cards at some point. The Greek fiber market needs some serious investment.

According to Deloitte, the financial crisis in Greece, combined with the country’s difficult terrain, means the fiber infrastructure is seriously deficient; the company puts active super-fast broadband connections at just 27,000, citing European Commission statistics from last year.

To add further context, the FTTH Council shows Europe’s data Greece as a European laggard. Its September 2020 data ranks the country almost at the bottom of its 39 markets with coverage of only 9.9% of households, while prevalence remained below 1% of households. At the time, it had nearly 4 million homes left to cover, or put another way, most of them.

Wind claims to have 110,000 active wholesale customers for next-generation access, which will be transferred to the new device.

It is worth noting that Wind Hellas is in the process of being acquired of United Group, which plans to merge the telecommunications company with its Greek pay-TV provider Nova to create a single player. When that deal closes next year, Wind will be well positioned to compete more effectively in the retail market. The development of the fiber business into a separate wholesale player will probably serve to focus the merged company’s attention on the retail area in question.

Interestingly, the Deloitte report focuses heavily on the benefits of the wholesale fiber model, focusing in particular on predictable and stable cash flows, operating efficiency and the fact that wholesalers are an attractive prospect for long-term investors.

“Wholesale-only models provide greater returns on investment opportunities and therefore appear to be the new trend in the market,” the company noted.

It seems pretty clear which way the wind (ahem) is blowing.

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