EQT Infrastructure, a global infrastructure investor, and Proximus, the largest wireless carrier and fixed broadband provider in Belgium, today announced that their joint venture, called Fiberklaar, will invest €2.5bn in Belgium for the expansion of an open access wholesale fiber network.
Proximus – Broadband Market Positioning
Proximus is currently the largest provider of fixed broadband services in Belgium with 2.1 million subscribers (45% market share). Indeed, the company ranks ahead of telecom and cable broadband operators Telenet, VOO, and Orange Belgium. Notably, these companies primarily use copper or cable infrastructure to provide fixed broadband services, given that Belgium’s current fiber coverage stands at only 8%.
At year-end 2020, Proximus had an existing footprint of 460k fiber household passings.
Homes and Businesses Passed with Fiber (in 000s)
Currently, these fiber passings provide service to 16 cities across Belgium.
Belgium Fiber Coverage Map
Fiberklaar Joint Venture – Proximus and EQT Infrastructure
The €2.5bn investment into Fiberklaar’s fiber roll-out in Belgium will be funded through a combination of equity capital from EQT Infrastructure and Proximus, as well as debt from commercial banks. Indeed, these funds will be used for both the technical roll-out of fiber and operating expenses. Ultimately, the goal is to upgrade Proximus’ network to be capable of delivering speeds of 1 gigabit per second.
Overall, Fiberklaar intends to pass 1.5 million homes in Belgium with optical fiber technology by 2028. In turn, the Fiberklaar joint venture allows Proximus to accelerate its total fiber roll-out plan, which aims to reach 4.2 million homes and businesses in Belgium with fiber by 2028.
Notably, Proximus’ 4.2 million target, equates to covering 70% of the homes and businesses in Belgium with fiber. To execute this goal, Proximus is currently operating at an annual pacing of 250k fiber household passings.
Open Access Wholesale Fiber Network
Fiberklaar is structured as an open access wholesale fiber network. This means that it is open to all operators and service providers who want to offer their services. Specifically, these providers include companies offering internet, digital TV, cloud, gaming, VR, streaming, and telephony services.
Fiber Roll-Out Begins
Following Fiberklaar’s recent approval from the European Commission Competition Authority, the company will now start deploying fiber-to-the-home (FTTH) technology. Specifically, the company will begin its fiber build-out in late 2021, starting with 12 cities and towns in Belgium.
Fiberklaar Joint Venture – Rationale
Fiberklaar will be led by its Chief Executive Officer, Rik Missault, formerly of Alcatel, Enfinity, Matexi, and ION. The company notes that internet consumption in Belgium has risen sharply due to the, often simultaneous, use of video calls, streaming services such as Netflix, gaming, and cloud applications.
However, the country’s current copper and cable networks have limitations in downstream and especially upstream bandwidth capabilities. Therefore, the existing digital infrastructure of Belgium is struggling to support the robust increase in demand. Indeed, Fiberklaar, with the backing of EQT and Proximus, is building a solution, through its fiber optic network, which allows for virtually unlimited stable data traffic in both directions.