Recently, Austrian telecom operator Magenta Telekom announced that it has established a joint venture with investment company Meridiam, and will invest 1 billion euros in laying fiber optic networks in Austria by 2030.
A subsidiary of Deutsche Telekom, the operator is accelerating the pace of its network expansion across the board in Austria. At its full-year results presentation in February, the company pledged to invest 1 billion euros in broadband and 5G networks. It plans to formally spend the funds between 2022 and 2025.
Between now and 2030, Magenta Telekom's partnership with Meridiam will also cost €1 billion to roll out fiber-to-the-home (FTTH) to 650,000 homes and businesses in rural and urban areas.
Magenta did not disclose the ratio of its own investment to Meridiam's.
According to reports, Meridiam is a French infrastructure investment company that already has a related business in Austria, albeit outside the telecommunications sector. However, Magenta Telekom noted that the company has already committed up to €1.7 billion in high-speed internet projects in other parts of the world, including Germany, Romania, and North America, with a special focus on underserved communities.
As currently arranged, Magenta Telekom and Meridiam will fund projects between the parties and are still evaluating the possibility of bringing in public funding. The key to this project is that it is different from similar projects - there is no minimum guarantee of network deployment in a specific area.
Andreas Bierwirth, the outgoing CEO of Magenta Telekom, said: “We are expanding rapidly, we will bring high-performance internet to the region faster, and we will coordinate the expansion of the mobile network. This way, every community can Have the best, well-integrated fiber and mobile communications infrastructure.”
Separately, Magenta Telekom announced earlier this month that Bierwirth had opted to leave the company. He is replaced by Rodrigo Diehl, who is currently in charge of Deutsche Telekom's European B2C business, but will move from Bonn to Vienna in October to take up his new role.
Therefore, construction cannot begin until the European Commission approves the joint venture, and it is likely that Diehl will lead the extension of the network. However, the two companies have already started the approval process, which is expected to be granted by the end of the year. Given the EU's commitment to improving gigabit internet connections, it has also been significantly easier for these plans to pass scrutiny.
Stephan Wehrmann, Director of Business Development at DACH Meridian, said: "We look forward to working with Magenta and the local community to develop this vital infrastructure, provide high-quality internet access and have a lasting positive impact on society."
Of course, Magenta Telekom isn't the only company pushing fiber optics in Austria. Earlier this week, Austrian telecom A1 announced a wholesale fiber deal with rival Drei and said it would open up its fiber infrastructure to other companies. In the statement, A1 CEO Marcus Grausam noted that the telco has committed to invest more than 500 million euros to expand its digital infrastructure this year.
But Magenta Telekom is now an increasingly formidable competitor. Deutsche Telekom bought the Austrian arm of cable operator UPC five years ago for a hefty €2bn, then merged it with the local mobile business to form Magenta Telekom, acquiring a full-scale HFC network in the process. Now, it appears to be taking the opportunity to pour more money into border areas and build on that.
