UK-based telecoms giant Vodafone Group has revealed that, having secured network sharing agreements in ‘several key markets’, it intends to proceed with plans ‘to monetise a substantial proportion of its European tower infrastructure during the next 18 months’.
In a press release related to the development, Vodafone Group noted that previously, in November 2018, it undertook a review of its European tower portfolio with a view to improving asset utilisation. Since then, the company has reportedly conducted extensive due diligence and evaluated the formation of a European tower operator and the potential opportunities and risks associated with tower monetisation in all of its major European markets. During this period, Vodafone Group claims to have received ‘several’ offers for various parts of its tower portfolio, which it said had highlighted that its assets would command an ‘attractive valuation’.
As a result, Vodafone Group has decided to legally separate its passive tower assets in order to create a new organisation, referred to for now as ‘TowerCo’, with a dedicated management team. With this entity expected to be operational by May 2020, the British outfit has claimed that TowerCo will own Europe’s largest tower portfolio, comprising approximately 61,700 towers across ten countries, with 75% of these sites in Germany, Italy, Spain and the UK. Based on market benchmarks for anchor tenant lease rates, existing third-party revenues and the attributable cost base, Vodafone Group has suggested that TowerCo could generate proportionate annual revenue and EBITDA of around EUR1.7 billion (USD1.9 billion) and EUR900 million, respectively.