Telefonica speeds copper to fiber transition with new €1B green bond

Telefonica successfully raised €1 billion ($1.07 billion) from its latest green bond offering, money it plans to use to help accelerate its transition from copper to fiber as it works to become the first operator to complete the shift.

The operator said in a recent press release the move from copper to fiber will help it increase the energy efficiency of its network. It added the funds will go toward the deployment of 5G technology as well as the rollout and improvement of broadband connectivity in underserved rural areas. Funding will also be allocated for social projects to boost entrepreneurship and “employment generation.”

Notes from the offering will come due in May 2031. Telefonica stated the offering was oversubscribed by nearly 2.5 times.

The bond is the latest issued by the operator, which became the first in the industry to offer a green bond in January 2019. It subsequently added a green hybrid in 2020 and two sustainable hybrids in 2021. Telefonica used money from its initial €1 billion green bond for copper to fiber transition projects in Spain as well.

Its decision to use some of the new funding for its copper to fiber transition comes as the operator pushes to achieve a goal of becoming the first telco to fully replace its copper network with fiber by 2024. In its year end 2021 and Q1 2022 reports, Telefonica said it has closed 1,458 central offices to date in Spain and recycled 81,000 tons of copper cable since 2016. A partial turn down of its copper assets in Brazil and its Hispam markets is also underway. The operator has said fiber is 85% more efficient than copper access.

However, it is far from the only one working toward such a target. Canadian operator Telus has said it expects migration of its copper customers to fiber to be completed by the end of 2022 or early 2023. In the U.K., Virgin Media O2 is aiming to upgrade its entire fixed network with fiber by 2028 and BT said its copper network will be fully replaced by IP-based digital infrastructure by the end of 2025.

In the U.S., operators Verizon and AT&T are also retiring copper assets, though it is unclear when a full shutdown of their copper networks might be complete.

Verizon CTO Kyle Malady said in March it has already upgraded 4.5 million circuits on its network to fiber and is aiming to extend the reach of its Fios network to 18 million homes by the end of 2025.

Like Telefonica, Verizon has also issued green bonds, but has primarily used these to purchase renewable energy.