Telefónica has successfully raised 1 billion euros ($1.07 billion) from its latest green bond offering, which it plans to use to help accelerate the transition from copper to fiber as it strives to be the first operator to complete the switch.
The operator said the shift from copper to fiber will help improve the energy efficiency of its network. The funds will be used to deploy 5G technology and to roll out and improve broadband connectivity in underserved rural areas. Funds will also be allocated for social projects to promote entrepreneurship and "job creation. The notes in the offering will mature in May 2031. The issue was oversubscribed by nearly 2.5 times.
The bond is the operator's latest offering, becoming the first in the industry to offer a green bond in January 2019. Subsequently, the company added a green hybrid bond in 2020 and two sustainable hybrid bonds in 2021. Telefónica used the initial €1 billion to fund a green bond for Spain's copper-to-fiber transition project as well.
It decided to use some of the new funds for its copper-to-fiber transition as the operator works toward its goal of becoming the first telco to completely replace its copper network with fiber by 2024. In its report for the end of 2021 and the first quarter of 2022, Telefonica said it has closed 1,458 central offices in Spain and recycled 81,000 tons of copper cable since 2016. Partial production reductions are also underway at its copper assets in Brazil and in its Hispam market. The operator says fiber is 85 percent more efficient than copper access.
However, it is far from the only one working toward such a goal. Canadian operator Telus said it expects the 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 aims to upgrade its entire fixed network with fiber by 2028, and BT says its copper will have its network completely replaced by an IP-based digital infrastructure by the end of 2025.
In the U.S., carriers Verizon and AT&T are also phasing out their copper assets, but it's unclear when they will be able to shut down their copper networks entirely.
Verizon Chief Technology Officer Kyle Malady said in March that it has upgraded 4.5 million circuits on its network to fiber and plans to expand the reach of its Fios network to 18 million homes by the end of 2025.
Like Telefónica, Verizon has issued green bonds, but mainly to buy renewable energy.
