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Fiber-sharing taking hold as Europe thirsts for bandwidth

Published 08/25/2017, 11:39 AM
© Reuters.  Fiber-sharing taking hold as Europe thirsts for bandwidth
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  • A trend in Europe of companies partnering on mobile towers to save funds appears to be spreading to fiber deployments, amid a heavy appetite for high-speed data and a new generation of hungry applications coming down the road.
  • Talks between Vodafone (NASDAQ:VOD) and BT Group (NYSE:BT) may be an indication that the fiber-sharing approach more common on the Iberian peninsula is coming to wider Europe.
  • Partnering on fiber can result in higher profits than if companies rent capacity from incumbents like Telefonica (NYSE:TEF) or Orange (NYSE:ORAN) -- EBITDA margins of 50% rather than 20% in the case of wholesale deals, according to Bloomberg.
  • With regard to the VOD-BT arrangement: Full-fiber coverage in the UK is about 2%; it costs about £500 per home passed, and operators need to hit a 30% take-up rate for a decent return.
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