Salt and Sunrise enter strategic fibre partnership to extend FTTH

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They aim to deliver fibre-based broadband services to 1.5 million homes in Switzerland over five to seven years.

Sunrise Communications and Salt (which is owned by Iliad) are planning a joint venture, Swiss Open Fiber, to create a fibre to the home (FTTH) platform for ultrafast broadband connectivity services on an open access basis across Switzerland.

The roll-out will be realised through Swiss Open Fiber: the companies will have equal shareholding and have initiated discussions with potential equity partners and financing banks, and are looking to sign respective agreements in the coming months.

Greater density

Swiss Open Fiber aims to pass 1.5 million homes in the coming five to seven years, investing up to CHF 3 billion (€2.8 billion) in areas without fast broadband services and to densify digitalisation in urban areas.

Salt and Sunrise will act as anchor tenants with access to the infrastructure offered to all retail operators to provide their customers with ultrafast broadband connectivity services.

This includes working closely and strategically with Swiss Fibre Net, a collaborative venture between local and regional energy providers in Switzerland, which will support the set-up and operating activities.

Andreas Waber, CEO of SFN commented, “Our already successful relationship with both operators will become even stronger and we look forward to promoting an open fibre infrastructure in Switzerland.“

Experience and equity

Swiss Open Fiber will have Marc Furrer as its CEO.

The new infrastructure will bring substantial environmental benefits through energy efficient network sharing and transition to fibre.

This project follows a proven collaborative model that is being successfully implemented in several European countries, including Germany, France and Italy. The roll-out is expected to start in the fourth quarter of 2020.

Room for improvement

André Krause, CEO of Sunrise, says “We are excited to embark on this joint venture which will accelerate ultrafast broadband connectivity and significantly improve fibre penetration in Switzerland relative to other European countries.

According to the FTTH Council Europe’s latest ranking of fibre penetration, to September 2019, Switzerland is a lower-middle ranking country with a penetration rate of 21.3%, meaning there is much scope for the new joint venture – see below.

The proposed joint endeavour is unlikely to meet with regulatory opposition, as it will strengthen competition with former incumbent Swisscom and promises to accelerate the build out of a national fibre infrastructure.

Source: iData for the FTTH Council Europe

Salt and Sunrise have respectively engaged Lazard and Morgan Stanley as financial advisors.