Telefónica, Telefônica Brasil and CDPQ create FiBrasil, a neutral fibre wholesale network provider in Brazil

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Telefónica Group, one of the largest telecommunications service operators globally, and Caisse de dépôt et placement du Québec (CDPQ), a global investment group, have reached an agreement for the construction, development and operation of a neutral and independent optical fibre wholesale network in Brazil with the creation of FiBrasil Infraestrutura e Fibra Ótica SA (“FiBrasil”). Upon completion of the transaction, Telefónica Group and CDPQ will each hold 50% in FiBrasil under a co-control governance model. Telefónica Group’s 50% participation will be held through Telefônica Brazil (“Vivo”) and Telefónica Infra, the infrastructure arm of Telefónica Group, each holding a stake of 25%. Operating as a neutral wholesale company, FiBrasil is set to deploy and operate fibre-optic networks in selected mid-sized cities across Brazil outside the state of Sao Paulo, and to offer fibre-to-the-home (“FTTH”) wholesale access to all telecommunications service providers, enabling them to offer these services to their end customers. Starting with a portfolio of 1.6 million Homes Passed (“HPs”) contributed by Telefônica Brasil, FiBrasil aims to expand its network to reach around 5.5 million HPs within 4 years, accelerating the transition to fibre and contributing to the country’s technological deployment. CDPQ is investing a total of up to R$1.8 billion (CA$408 million) in this joint venture, comprising both primary and secondary payments. CDPQ’s projected capital contributions and the expected leverage to be raised by FiBrasil provide a fully funded business plan to accomplish the company’s deployment targets. FiBrasil is set to become a leading operator in the Brazilian fibre space, with the backing of a strong set of shareholders. As one of the world’s largest global institutional investors in infrastructure with net assets of CA$30 billion (R$ 136 billion) in this sector, CDPQ contributes its strong investment capacity and longstanding expertise in managing infrastructure investments. Telefónica, one of the largest telecommunications service operators globally, provides strong pillars supporting the company’s growth plans and brings its technical capabilities and track record in deploying and operating fibre networks. In addition, FiBrasil will benefit from Vivo’s commercialization capabilities over its various on and offline channels as its anchor client. false false false The transaction is subject to regulatory approval and closing is expected to occur in the second quarter of 2021. false false false About Telefónica Telefónica is one of the largest telecommunications service providers in the world. The company offers fixed and mobile connectivity as well as a wide range of digital services for residential and business customers. With over 345 million customers, Telefónica operates in Europe and Latin America. Telefónica is a 100% listed company and its shares are traded on the Spanish Stock Market and on those in New York and Lima. In 2019, Telefónica set an action plan as a catalyst for the transformation of the company. The plan seeks to prioritize its four relevant markets and grow sustainably in the long term, boost its growth potential while leveraging the value of its infrastructure, increase agility and improve efficiency. About Telefónica Infra Telefónica Infra, a fully owned unit of Telefónica Group, manages stakes in infrastructure vehicles alongside financial investors. Its objectives include crystallizing the value of Telefónica’s infrastructure assets and know how through dedicated management and increased focus, partnering with leading financial investors to co-invest in growth opportunities involving flexible partnership structures and business models. Telefónica Infra’s investment portfolio currently comprises a 50.01% stake in Telxius (telxius.com) and a 40% stake in Unsere Grüne Glasfaser (ugg.tech). About Telefônica Brasil Telefônica Brasil (“Vivo”), offers to its customers a complete portfolio of products, including voice services (fixed and mobile), mobile data, fixed broadband, ultra broadband, pay TV, technology and digital services (such as financial, cloud services, entertainment and security). Absolute leader in the mobile segment, with 78.5 million lines in operation, corresponding to 33.6% of the total active lines in Brazil. The company covers 90.8% of the population with 4G network and accelerates the launch of cities with the 4.5G network, which reached 1,872 cities in December 2020, maintaining the differentiation of its network in relation to the main competitors. In the fixed operation, it ended December 2020 with 15.7 million HPs with fibre-optic technology to the customer’s home (FTTH - home fibre) in 266 cities. In addition, all cities that rely on FTTH technology also have TV over fibre (IPTV), aiming to offer the best speed and experience to our consumers. About CDPQ At Caisse de dépôt et placement du Québec (CDPQ), we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2020, CDPQ’s net assets total CAD 365.5 billion. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.