Vodafone is set to forfeit more than one billion euros in potential earnings following an agreement that allows Patrick Drahi to divest his stake in OXG, the German broadband joint venture. This transaction relieves the billionaire of his obligation to settle previously agreed-upon payments. The British telecom group had anticipated receiving a 487 million euro deferred payment from Drahi's Geodesia Holding, alongside potential earn-out income of up to 595 million euros, contingent on OXG meeting specific development milestones and operational performance targets. However, according to sources familiar with the deal's terms, Société Générale, which agreed this month to acquire Drahi's 50% stake in OXG, is not required to assume these identical performance commitments, leaving Vodafone without the expected funds.

Vodafone has not yet disclosed this development to its investors. The FTSE 100 company stated that replacing Drahi with Société Générale represents the best option for balancing funding certainty and strategic flexibility, a decision reflected in the terms of the agreement. Vodafone added that it supports Altice's exit and welcomes Société Générale as a long-term investor. When Vodafone partnered with Drahi's telecom enterprise Altice to establish OXG in 2023, the Franco-Israeli tycoon's empire was already struggling under the weight of high interest rates, with his businesses heavily reliant on billions of dollars in junk bond financing.

New Street Research analyst James Ratzer commented that selecting Drahi as a partner has proven to be a misstep for Vodafone. Drahi had already agreed in June to sell his French telecom business SFR for 20.35 billion euros to alleviate his debt crisis. Ratzer expressed surprise at Vodafone's decision to forgo the expected payments, noting that Drahi had just renewed the OXG-related guarantees last year and was poised to receive cash from the SFR sale. In a separate development, Xavier Niel acquired a 16% stake in Vodafone in July, becoming the largest shareholder of the FTSE-listed company. The French telecom magnate has since increased his holding to 19%.

OXG was established with a commitment to invest 7 billion euros over six years to roll out fibre broadband to more than 7 million households in Germany. However, construction costs have exceeded expectations, slowing the project's progress. As of September 2026, the network has only reached 1 million households. Sources indicate that Drahi's initial deferred payment would only become due once OXG's coverage surpassed 1.5 million households, with Vodafone originally expecting to receive any funds no earlier than the 2028 fiscal year. Drahi transferred his equity in the broadband venture, along with several other assets, away from creditors who held 8 billion euros in claims, sparking controversy. As a result, Altice International's creditors have been closely monitoring Drahi's OXG stake.

For Vodafone, this loss of potential revenue coincides with the company being forced to refund additional income derived from a 5 euro monthly price increase for German broadband customers implemented in 2023. The European Court of Justice ruled last week that EU telecom regulations do not grant operators automatic statutory rights to unilaterally modify general service terms. New Street Research estimates that this ruling could compel Vodafone to reimburse between 100 million and 200 million euros.