Liberty Global has teamed up with a private equity firm to invest in rolling out fibre infrastructure in Germany.

The telecoms group, which sold out of Germany just over two years ago when it offloaded its Unitymedia cable operation to Vodafone, is setting up a 50:50 joint venture with InfraVia Capital Partners to plough some cash – and then maybe more – into the country’s fibre-to-the-home (FTTH) market.

This is very much a financial investment, and not a telco operational expansion move. Liberty Global is participating in the JV via its Liberty Global Ventures investment arm, and the companies are talking about the opportunities associated with network building, not serving retail customers. Indeed, Liberty Global referred to its experience with Unitymedia in the announcement, but did so in the context of experience in the German market, particularly from the point of view of network expansion and working with the relevant municipalities and regional authorities to make that happen.

Speaking of authorities, the firms have still to secure the regulatory go-ahead for their investment plan.

The companies have not disclosed how much of a financial punt they are taking on FTTH in Germany, but it’s clear that their approach will be very measured.

It’s a modular approach, with the first phase of investment centring on a small number of municipalities. The pair have set out undisclosed success criteria for that phase, which if met will trigger further investment opportunities. Or to put it another way, they are sticking a toe in the water before plunging in.

“Liberty Networks Germany offers an exciting opportunity to leverage our expertise in deploying critical broadband infrastructure in a market we know very well,” said Robert Dunn, Managing Director, Connectivity Investments at Liberty Global.

“We’re also excited by the attractive returns offered by greenfield fibre network deployment in a country where millions of homes don’t yet have access to fast and reliable broadband. We look forward to working in partnership with InfraVia as we take a controlled approach to the opportunity as we move forward,” Dunn said.

Essentially, Liberty Global wants a piece of the action that investors have been snapping over the past few years: the long-term, predictable financial returns offered by telecoms infrastructure.

And Germany is a great place to start, given the growth opportunity afforded by the market that stems from it being a major European economy that had a slow start in fibre.

When the FTTH Council Europe and IDATE published their latest set of full fibre market forecasts earlier this month their analysts named Germany as a market with “huge growth potential,” predicting that the number of homes passed there will growth almost fourfold to 33 million by 2026, leaving it second only to Russia in terms of volume.

“We are excited to be working with Liberty Global to explore this opportunity in Germany, seizing on the ever-increasing data usage and the acceleration of work from home patterns,” said Bruno Candès, Partner, InfraVia Capital Partners. “We look forward to leveraging the investment capacity of our fifth infrastructure fund and our leading expertise in digital infrastructure investments during this project.”

It’s a smart idea for a project, but there are many others rolling out full fibre in Germany at present, aside from the incumbent Deutsche Telekom, which is also making progress after dragging its heels for some years. Liberty Global and InfraVia are not the only ones looking to make money from fibre in Germany.

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