Telefonica hires Goldman Sachs to explore tower sale

15 Oct 2019

Spanish telecoms giant Telefonica has hired investment bank Goldman Sachs to explore a potential sale of 50,000 wireless towers across multiple markets, Mobile World Live reported. Contracted via Telefonica’s O2 UK unit, Goldman Sachs will advise the group on the sale of its stake in Cornerstone Telecommunications Infrastructure Limited (CTIL), a joint venture with Vodafone which controls Telefonica’s UK tower assets, as well as sites in countries including Spain, Germany and Brazil. Goldman Sachs’ mandate reportedly also encompasses a review of Telefonica’s entire wireless infrastructure assets.

Telefonica’s investor website says that the group owns 68,000 of the 130,000 tower sites on its networks globally, while towercos and other operators own the other 62,000. Of the 68,000 self-owned towers – spanning twelve countries (Germany, the UK, Spain, Brazil, Argentina, Ecuador, Colombia, Uruguay, Chile, Peru, Mexico and Venezuela) – 18,000 are owned via Telefonica’s infrastructure unit Telxius (across six of these European/Latin American markets). Telefonica has estimated that the remaining 50,000 sites could generate approximately EUR830 million (USD915 million) in revenues and EUR360 million in operating income before depreciation and amortisation (OIBDA) whilst requiring roughly EUR25 million in maintenance capital expenditure on a full year pro-forma basis.

Note that in the UK, Telefonica owns around 7,000 sites representing 50% of the total sites owned by CTIL, consistent with its 50/50 JV with Vodafone.

Spain, O2 UK, Telefonica