Financial investors are close to leave the German FTTH rollout market?

The German fibre network builder Glasfaser Direkt filed for insolvency because of the withdrawal of its major investor, the UK-based infrastructure investor John Laing group. It’s the same investor group that has just acquired a portfolio of assets from the Irish Infrastructure Fund including Ireland’s largest independent TowerCo for €1bn in last December.

HelloFiber, a joint venture between Liberty Global Ventures and InfraVia Capital Partners, has also filed for bankruptcy protection this year. HelloFiber has began to build fibre-to-the-home greenfield networks by targeting under-served municipalities only five months ago.

Leaving investors invoke major changes in macroeconomic conditions inlcuding rising inflation, uncertain interest rates, and a lack of access to external capital.  Liberty Global also mentioned rising rollout costs and a lack of construction capacity in the country.

In Germany real GDP increased by 1.8% in 2022, but in the fourth quarter investment and private consumption decreased with real GDP contracting by 0.2%. YoY inflation reached 8,7% last year and the rising producer costs are set to keep HICP inflation at a projected 6.3% in 2023. The long term interest rate increased from 0.15% to 2.19% in one year time.