(Write with COO comments)
MADRID, February 25 (Reuters) – Telefonica is in exclusive talks with financial investors about setting up a joint fiber optic venture in Brazil, Chief Operating Officer Angel Vila said Thursday.
The Spanish telecommunications group plans to expand high-speed fiber-optic coverage to more cities in Brazil, following a similar project launched in Germany in partnership with insurance company Allianz.
“Brazil is the size of a continent. Our capital expenditure (capex) will not reach everything, “Vila told Reuters.
After speaking with many potential partners, the company has held exclusive talks with “international operators with a financial and infrastructure profile”, said Vila, declining to name investors.
Talks have progressed, he added, but “in this situation you can never say 100% that you will sign.”
Previously Vila told analysts that the second phase of development could be done through agreements with fiber owners such as the American Tower.
Telefonica is already using the infrastructure of larger US companies in the Brazilian states of Minas Gerais and Vila said they “may be interested in consolidating” the agreement.
Vila said she could not confirm a Bloomberg News report that exclusive talks were held with Canadian pension fund Caisse de depot el placement du Quebec (CDPQ), due to a confidentiality agreement.
“CDPQ is a top class long-term global investor, that would be very attractive,” he added.
American Tower did not immediately respond to a request for comment. CDPQ could not be reached immediately.
Telefonica plans to hold half of the business through Telefonica and its local branch Telefonica Brasil.
Vila told analysts by conference call that it could expand the unit later through acquisitions.
Telefonica cut its dividend after reporting a 10% drop in previous 2020 earnings on Thursday, although it expects business to stabilize this year. (Reporting by Isla Binnie, Eid by Inti Landauro, Kirsten Donovan)