Canada’s Public Sector Pension Investment Board (PSP Investments) is partnering with the country’s largest telecom company, BCE, to form a new joint venture dubbed Network FiberCo. The partnership marks the latest chapter in a long-standing relationship between the two organizations and an expansion of PSP Investments’ involvement in the U.S. telecommunications market.

A consortium including PSP Investments, the British Columbia Investment Management Corporation, the Canada Pension Plan Investment Board, and Searchlight Capital Partners acquired Frontier Communications’ Northwest U.S. operations in 2020. The transaction, which was valued at $1.4 billion and involved an additional $500 million committed to network and service improvements, led to the formation of Ziply Fiber.

Last November, BCE made an offer to acquire Ziply Fiber via its Bell Canada subsidiary for $3.6 billion. With PSP Investments entering the picture, the proposed formation of Network FiberCo would expand broadband access in underserved U.S. markets by further developing approximately 1 million fiber connections in states where Ziply Fiber currently operates and potentially add up to 5 million more.

Under the joint venture’s ownership structure, PSP Investments will hold a 51% stake in Network FiberCo, while BCE, through Ziply Fiber, will own 49%. PSP Investments has committed to invest upwards of $1.5 billion to support the venture.

This is not the first significant collaboration between BCE and PSP Investments. In December 2006, the pension system and Loral Space & Communications acquired Telesat from BCE for C$3.28 billion. In 2007, a consortium including PSP Investments, CPP Investments, and CDPQ entered into discussions to take BCE private to take BCE private — a plan that was ultimately abandoned.

“PSP Investments is pleased to partner with BCE, a long-standing Canadian champion of innovation and connectivity, to support the development of fibre infrastructure in Ziply Fiber’s target markets, which benefit from secular tailwinds,” said Deborah Orida, president and CEO of PSP Investments. She highlighted the strategic alignment, noting the partnership will generate inflation-linked returns while supporting the retirement needs of Canadian public sector workers.

The transaction is expected to close in the second half of 2025, pending standard closing conditions and the completion of BCE’s Ziply Fiber acquisition. Once finalized, Ziply Fiber will operate as BCE’s subsidiary and serve as the exclusive internet service provider for Network FiberCo’s expanded fiber network.