SFR FTTH buys fibre wholesaler Covage for a billion euros

The French fibre sector is undergoing a spot of consolidation with the news that Altice-owned SFR is acquiring the country’s fourth largest fibre wholesaler.

Covage is currently owned by hedge fund Cube Infrastructure, which has apparently decided its time to liquidate its position. It currently serves 800,000 homes with fibre, with another 1.6 million in the pipeline. This acquisition will give SFR FTTH current coverage of 2.5 million homes and 5.5 million on the way.

“I am very pleased that we are further expanding the leading FTTH wholesaler in Europe,” said Patrick Drahi, Altice founder. “We are extremely proud to integrate Covage, a great company, with a portfolio of areas in France complementary to ours. With this transaction we also bring onboard excellent local relationships.

“We continue to be focused on deleveraging Altice Europe notably thanks to growing revenues and EBITDA which will be supplemented with disposal proceeds. As I have explained previously, we are in advanced discussions with several parties in relation to our Portuguese fibre asset. This process is supported by the significant appetite for fibre in Europe clearly demonstrated by the present transaction which has been strongly supported by our financial partners in SFR FTTH.”

Dropping a cool billion on an acquisition is a funny way of deleveraging, but who are we to argue with a telecoms tycoon? SFR is the main competitor to Orange in the French fibre market, with both of them acting as wholesalers in what seems to be a fairly competitive environment. Further consolidation wouldn’t come as a surprise, especially with the help of a bit of creative accounting.