Fibre optic technology has become a core part of the infrastructure asset class for institutional investors, the CEO of SiFi Networks told investors at this year’s IPE Real Assets & Infrastructure Conference in Brussels.
Ben Bawtree-Jobson, whose company is building the largest privately funded, open-access fibre network in North America, said fibre is “a core utility and not a medium purely for entertainment”.
Presenting on the topic of telecom infrastructure and 5G technology, he said other similar types assets like data centres and cell towers have both “transitioned” from being seen as telecom companies to established infrastructure assets.
These assets have demonstrated a steady increase in earnings from single-digit to mid-teens, he said, and fibre networks have the potential for a similar trajectory in terms of yields and capital appreciation.
Bawtree-Jobson said the advancement of cellular network technology from 3G to 4G and now 5G will require more fibre infrastructure, which involves the installation of the fibre hardware.
SiFi Networks is rolling out a FiberCity fibre network in Fullerton, California, with financial backing from infrastructure fund manager Whitehelm Capital and Dutch pension fund investor APG.
Every country has different dynamics to contend with but with similar principles, he said. In the US, for instance, 70% of the country is still not connected to fibre.
To enable investors and developers reap the full benefits of the fibre infrastructure network, the asset has to be built to be future proof and resilient so it can be used for multiple applications. This he said includes managing construction risk and project finance.
It is an “exciting new age for fibre” as a new infrastructure asset class, he said, adding that we’ll be seeing land grab as investors try to gain territories.
During a subsequent panel discussion, Philippe Lefebvre, who heads the European Commission’s deployment of 5G technology, said policymakers can help by “de-risking the investment to make it acceptable for the private investors” – for instance, in the form of public loan facilities.
Nicolas Mallet, partner at Antin Infrastructure Partners, said market dynamics vary in each country and so investors need to consider individual national regulations.
A previous version of this story incorrectly said SiFi Networks is rolling out a CyberCityTM fibre network. SiFi Networks is rolling out a FiberCity fibre network in Fullerton, California.
