21 Feb 2017
Spanish telecoms giant Telefonica has agreed to sell up to a 40% stake in its infrastructure division Telxius for a total of EUR1.275 billion (USD1.354 billion), or EUR12.75 per share, to investment firm Kohlberg Kravis Roberts (KKR) Group. Telxius owns and operates around 16,000 telecommunications towers in five countries, and manages an international network with approximately 65,000km of submarine fibre-optic cables, of which around 31,000km are owned by Telxius. Under the terms of the agreement, which is still subject to regulatory approvals, Telefonica will remain as the anchor tenant for Telxius’ tower and cable businesses. The Spanish company will retain a majority stake as well as operational control of Telxius and will continue to consolidate its accounts. The agreement will initially see KKR acquire 62 million shares (24.8% of the total shares) for EUR790 million, with the option to acquire and sell an additional 38 million shares (15.2% of the total shares) for an amount of at least EUR485 million. The latter is related to a call/put option that will be exercisable in Q4 2017. Commenting on the deal, KKR’s Global Co-Head of Infrastructure and Head of Spain Jesus Olmos said: ‘The combination of Telefonica’s industrial expertise and KKR’s financial and operational support will help Telxius as it continues to scale and grow. We are confident that the exploding demand for mobile data … together with the need for reliable internet infrastructure will help drive strong growth in the business.’
Indian mobile provider Idea Cellular is looking to sell off its tower assets via two separate deals, with Bharti Infratel – the infrastructure arm of cellco Bharti Airtel – and US-based passive infrastructure group American Tower Corporation (ATC) Live Mint writes, citing people familiar with the company’s discussions with the two potential buyers. According to the sources, the operator is planning to offload its 16% stake in Indus Towers to Infratel, which already holds a 42% stake in Indus. ATC, meanwhile, is expected to acquire the cellco’s wholly-owned tower firm Idea Cellular Infrastructure Services Limited (ICISL), though the Economic times writes that ATC is keen to guarantee that Idea will stay on as an anchor tenant on the sites, amidst concerns that Idea’s rumoured merger with Vodafone India would create overlaps and redundant sites. The paper’s sources claim that ATC has sought a guarantee that Idea – and the potential Idea/Vodafone merged entity – would continue its tenancy on the sites for eight to ten years. ICISL owns and operates 9,838 towers with a total of 16,549 tenancies.
Staying with India, Tata Teleservices Limited (TTSL) is close to finalising a deal with American Tower Corporation (ATC) to sell its remaining 26% stake in passive infrastructure provider Viom Networks, the Economic Times writes, citing industry sources. ATC purchased a 51% interest in Viom last year – including roughly 28% of the company’s shares from TTSL – for INR76.35 billion (USD1.14 billion) and merged the company with its existing Indian business. The sale has been pegged at INR40.00 billion, the sources noted.
Barcelona-based infrastructure operator Cellnex has booked total revenue of EUR707 million for the full year to end-December 2016, representing annual growth of around 15%. Of that total EUR385 million was generated by its telecom infrastructure services – an increase of 27% year-on-year, fuelled by organic growth, and acquisitions – whilst broadcast infrastructure services contributed EUR235 million (2% y-o-y). Operating profit for the year was EUR87 million, compared to EUR63 million in 2015, although net profit dipped to EUR40 million from EUR48 million on the back of an increase in financial expenses. At 31 December 2016 Cellnex claimed a total of 16,828 sites (7,739 in Italy, 7,415 in Spain, 725 in the Netherlands, 371 in France and 578 in the UK), plus 1,072 distributed antenna systems (DAS) and small cell nodes managed by CommsCon in Italy. Average tenancy ratio across the group was 1.62, up from 1.53 in 2015.
Cellnex has also announced that it has signed a commercial agreement with outdoor advertising firm JCDecaux to accelerate the rollout of mobile small cells and DAS. The partnership will see the pair offer joint end-to-end solutions to facilitate network densification to customers in Spain and Italy. The tie-up will enable the deployment of small cells in street furniture and other assets managed by JCDecaux in cities and other high-traffic areas such as airports and shopping centres. Cellnex, meanwhile, will contribute ‘a network architecture providing an overview of all of the elements in the urban space, thus offering a comprehensive engineering solution, ranging from the identification and selection of eligible sites … connectivity to these elements, civil engineering works, global operation and maintenance.’
Bangladeshi mobile market leader *GrameenPhone*, backed by Norway’s Telenor Group, has sought permission from the Bangladesh Telecommunication Regulatory Commission (BTRC) to establish an independent subsidiary to own and operate its network infrastructure, the Daily Star writes. All of GrameenPhone’s roughly 12,000 towers would be transferred to the new company, along with any existing master service agreements. The move follows similar moves from cellular rivals Robi Axiata and Banglalink, though the latter is still awaiting regulatory approval.
Finally, Luxembourg’s Millicom International Cellular (MIC) has announced that it has initiated the process of selling its 22% stake in Helios Towers Africa. No further details have been published to date, however.
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