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Telefonica mulls selling stake in its Spanish fibre network - source

Telefonica mulls selling stake in its Spanish fibre network - source
Telefonica mulls selling stake in its Spanish fibre network - source   -   Copyright  Thomson Reuters 2021
By Reuters

MADRID – Spanish mobile and broadband operator Telefonica is considering selling a minority stake in its extensive Spanish fibre network following interest from the market, a source with knowledge of the sector told Reuters on Tuesday.

The overall value of the vast infrastructure asset has been estimated at 15 billion euros ($17.4 billion), according to news outlet Bloomberg which first reported the potential divestment option.

“The market is interested, there’s loads of interest from funds for a 15%-35% stake,” the source within the sector said, noting that there were between five and 10 more serious contenders. “They keep the stake for a few years and are asking for 7%-8% return on investment.”

European telcos have been casting around for ways to reduce their debt and generate cash following years of high costs and dwindling margins, particularly in Spain where telecom firms struggle in a hypercompetitive, fragmented and low-cost climate.

Telefonica declined to comment.

($1 = 0.8625 euros)