May 19, 2020 / 7:22 AM / 2 months ago

Switzerland's Sunrise, French-owned Salt link up in $3 billion broadband JV

FILE PHOTO: Internet LAN cables are pictured in this photo illustration taken in Sydney June 23, 2011. REUTERS/Tim Wimborne/File Photo

ZURICH (Reuters) - Swiss telecoms operator Sunrise Communications Group (SRCG.S) and Iliad’s (ILD.PA) Salt unit on Tuesday pledged to invest up to 3 billion Swiss francs ($3.09 billion) in a broadband partnership aimed at reaching 1.5 million homes by 2027.

Sunrise, blocked by shareholders last year from buying Liberty Global’s (LBTYA.O) Swiss UPC unit, is again pursuing a outside help, this time through a joint venture, as it seeks to compete with state-owned Swisscom (SCMN.S), Switzerland’s largest telecommunications provider.

Chief Executive Andre Krause, the former CFO who survived the UPC deal’s failure to become Sunrise’s top manager, said this new project, called Swiss Open Fiber, would be a joint venture co-owned equally by Salt and Sunrise, as well as a prospective equity partner.

Swiss Open Fiber will work with Swiss Fibre Net, an existing joint venture of local energy providers in Switzerland, which is due to support the new partnership’s set-up and operating activities, Sunrise said.

“While Salt and Sunrise will act as anchor tenants, the infrastructure network will be offered to all retail operators to enable them to provide their customers with ultrafast broadband connectivity services,” Sunrise said in a statement, adding that talks had begun with potential equity partners and financing banks.

The joint venture will be headed by Marc Furrer, the former head of Switzerland’s federal telecommunications regulator until 2016. Sunrise said similar ventures being put in place in European countries including Germany, France and Italy serve as models for this project.

($1 = 0.9717 Swiss francs)

Reporting by John Miller; editing by Thomas Seythal and Louise Heavens

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