DELTA Fiber, a fiber-based broadband provider in the Netherlands backed by the EQT Infrastructure III fund, today announced that it has secured a €2bn debt refinancing that will be used for the roll-out of its fiber network to 2 million homes and businesses throughout the Netherlands.
DELTA Fiber – Overview
Operating under the DELTA and Caiway (CAIW) brands, the company provides broadband at speeds of up to 1 gigabit per second, TV, and fixed & mobile telephony to both consumers and businesses.
DELTA Fiber owns both fiber-to-the-home (FTTH) and hybrid fiber-coaxial (HFC) networks in the Netherlands. Currently, DELTA Fiber has 900k home and business passings, throughout the country, which connect to its fiber and HFC networks.
Debt Refinancing – DELTA Fiber and EQT
Overall, five underwriters are coordinating DELTA Fiber’s €2bn debt refinancing package. Specifically, these lenders include ABN AMRO, ING, SEB, Santander, and Deutsche Bank, who will place the loan with a consortium of national and international banks.
DELTA Fiber’s fixed financing offers an initial €1.45bn of proceeds. Additionally, this financing can be expanded by an incremental €600m of proceeds, likely tied to the company’s continued deployment of new fiber infrastructure.
Notably, DELTA Fiber is the third recent debt refinancing, whereby a fiber portfolio company of EQT has refinanced their debt. Indeed, GlobalConnect secured a €2.7bn debt refinancing in late June, while Adamo closed a €600m debt refinancing in late July.
Strategy – EQT’s DELTA Fiber Deploys Fiber-to-the-Home in the Netherlands
By expanding its network, DELTA Fiber will grow to 2 million fiber connections for homes and businesses by 2025. This represents fiber passings that cover 25% of the Netherlands. Specifically, the company will target locations predominantly in smaller villages and towns throughout the Netherlands.
In terms of build-out pacing, DELTA Fiber can deliver 20k new connections per month. Therefore, by the end of 2021, the company expects to reach 1 million connections. Furthermore, this pacing will allow DELTA Fiber to hit its 2 million fiber connections target over the subsequent four years.
Given that DELTA Fiber’s existing network has a hybrid fiber-coaxial (HFC) infrastructure component, a portion of the company’s new fiber passings will likely be upgrades to its present HFC plant.
DELTA Fiber will offer customers higher internet speeds by using XGS-PON fiber technology. Indeed, this technology enables peak speeds of up to 10 gigabits per second.
Following its initial fiber build-outs, DELTA Fiber will begin to offer new subscriptions with much higher speeds to its customers.
Fixed Broadband in The Netherlands
The Netherlands’ fixed broadband market remains predominantly serviced by both copper and hybrid fiber-coaxial (HFC) infrastructure. DELTA Fiber is among a few providers, such as KPN (including its Glaspoort joint venture with APG), T-Mobile Netherlands (including its Open Dutch Fiber joint venture with KKR and DTCP), and L2Fiber that are rolling-out fiber infrastructure in the country.
Across all broadband technologies (including legacy), KPN, VodafoneZiggo, and T-Mobile Netherlands remain the three largest fixed broadband providers in the Netherlands.