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Open Fiber to invest $12.4bn in Italy

The capital represents the biggest ever EMEA funding deal in telecommunications networks.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

December 14, 2021 | 4:00 AM GMT

Open Fiber to invest $12.4bn in Italy

Mario Rossetti, CEO of Open Fiber. Source: Open Fiber

Italian telecommunications company Open Fiber said it will invest as much as €11 billion (US$12.43 billion) in the roll out of new fibre routes and supporting infrastructure across the country.

The investment which will cover 24 million homes, comes under a new business plan approved for the Milan-based operator by its board of directors on December 3, 2021 but only now shared publicly.

“The new plan, with a 2022-2031 horizon, extends VHCN (Very High Capacity Network) coverage to ‘grey areas’ – in which there is only one network operator and no-one else is planning to develop an NGA (Next Generation Access) network – starting with those involved in the coming months by Ministry for Technology and Digital Transition (MITD) tenders under the Italy 1 Giga Plan,” the company said in a statement.

“The new business plan confirms Open Fiber’s targets in black and white areas (over 7,000 municipalities in clusters C and D, where it acts as public concessionaire), with a focus – in terms of additional financial and organizational resources – on the completion by 2023 of all works in towns in white areas and, in particular, those covered by the EU’s ERDF and EAFRD funds.”

Open Fiber, 60% owned by CDP Equity and 40% by Macquarie Asset Management, said the investments will be covered by the extension of financing to €7.2 billion ($8.13 billion) from equity and cash generation.

Open Fiber intends to bid in all MITD calls for tender. Depending on their outcome, scheduled for June 2022, OF will set out a detailed plan for the additional grey areas in which it will compete and the corresponding increase in property units. For this OF will be able to draw on an additional credit line of €2.8 billion.

Open Fiber has reached an agreement with Italian and international banks including Banco BPM, Banco Santander, BNP Paribas, Crédit Agricole, ING Bank, Intesa, Société Générale, Unicredit, who will act as Global Coordinators, Bookrunners and Mandate Lead Arrangers.

The operation is intended to support further investments under the business plan and to refinance the previous Project Financing of €4.1 billion (4.63 billion), improving the existing terms and conditions and extending it to 2028.

At the end of the plan, margins are expected to exceed 75%, with over €2 billion ($2.26 billion) in revenues. Break Even (EBITDA net of investments) is forecast for 2026.

Mario Rossetti, CEO of Open Fiber, said: “In just a few years Open Fiber has gone from the start-up phase to playing a leading role in Italy and Europe in the development of all-fibre networks. With the strong support of shareholders and solid partnerships with leading operators, we are ready to complete our coverage of cities, small towns and industrial zones, making a decisive contribution to the goals of the Italy 1 Giga Plan for the closing of the digital divide in Italy”.

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João Marques Lima

Founder and Editor, The Tech Capital

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