Strategic change for Vodafone: The mobile communications and television cable group wants to invest billions in the expansion of fiber optic networks for fast Internet in Germany.

The aim is to supply around seven million households with fiber optics right into their homes within the next six years, which is called "Fiber to the Home" (FTTH for short) in the telecommunications industry.

Helmut Buender

Business correspondent in Düsseldorf.

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To this end, the group is founding a joint venture with the French network operator Altice, which is to raise up to 7 billion euros for the network.

The joint venture will be owned equally by Vodafone and Altice, the announcement said.

The lines would be "built into the four walls of your home according to the latest standards".

It should start after the necessary official approvals in spring 2023.

"We are starting the largest fiber optic alliance in the republic," said Vodafone's Germany boss Philippe Rogge.

So far, the Düsseldorf-based company has primarily relied on comparatively inexpensive, technically upgraded television cables for Internet supply, which create a bandwidth of up to 1 gigabit for downloading.

In the long term, however, fiber optic connections are considered the technology of the future because they enable higher performance and more stable connections.

The Vodafone competition has therefore already ramped up its investments and put the German company of the British group under pressure.

Concentration on metropolitan areas

A fifth of the new connections are to be created in regions where Vodafone does not yet operate any high-speed lines.

The remaining 80 percent would be built alongside existing cable infrastructure, which is concentrated in metropolitan areas.

The planned network of the new fiber optic company should be open to all telecommunications providers.

Competitors can then rent lines via wholesale contracts and market them to their end customers themselves.

This open access construction is also common in the case of construction projects by competitors, in order to utilize the expensive network more quickly with joint marketing.

The competition authorities usually insist on open network access for all providers.

As the British Vodafone parent company explained, 70 percent of the investments are financed through loans.

However, the loans do not end up on the company's own balance sheet, which is already heavily burdened with debt, but on the books of the joint venture between Vodafone and Altice.

Vodafone itself is to receive payments totaling 1.2 billion euros from the partner company.