Orange SA today announced an agreement with La Banque des Territoires (Caisse des Dépôts), CNP Assurances (CNP), and EDF Invest for the sale of a 50% co-controlling equity interest in newly formed, Orange Concessions, a fiber-to-the-home business in rural France.
The partnership between Orange, Caisse des Dépôts, CNP, and EDF Invest will enable Orange Concessions to grow its fiber business in rural France. Specifically, this transaction will allow Orange to meet its commitments to the French National Broadband Scheme, known as Public Initiative Networks (PINs). Indeed, the partnership will allow Orange to share the fiber investment, amongst its partners, for this project.
Orange Concessions – Fiber-to-the-Home Overview
Orange is the largest broadband provider in France with 11.9 million broadband subscribers, equating to a 39% market share. The newly formed Orange Concessions will be France’s leading fiber-to-the-home (FTTH) operator of networks rolled out and operated on behalf of local public authorities. Specifically, Orange Concessions will complete 23 Public Initiative Networks (PINs), representing over 4.5 million built or to-be-built fiber lines.
The networks operated by Orange Concessions on behalf of local public authorities are open to all operators. Additionally, fiber roll-out and maintenance will continue to be performed by Orange.
Financial Metrics – Orange Concessions
Orange’s fiber-to-the-home transaction values Orange Concessions at €2.7bn ($3.3bn USD). Indeed, this valuation provides a data point to highlight the relevance of Orange’s investments in fiber. Furthermore, the transaction will close by the end of 2021.
Transaction Rationale for Orange and Fiber-to-the-Home
Through this partnership, Orange will continue to pursue the development of fiber in rural areas of France. Specifically, the company will seek new Public Initiative Networks (PINs) and participate in market consolidation of other fiber providers. Notably, Orange highlights that this transaction is a key milestone in the delivery of its strategic plan, Engage 2025.
Overall, Orange Concessions is a strategic move to help Orange defend its broadband market share in rural areas of France. Specifically, the Orange Concessions venture allows the company to rapidly roll out its fiber-to-the-home (FTTH) network. In turn, this helps Orange fend off competition from its direct competitors. Indeed, competitors SFR, Iliad, and Bouygues, are also building-out fiber to rural France.