VEON agrees USD970m Russian tower asset sale

6 Sep 2021

VEON has sealed an agreement to sell its mobile network towers in Russia to Service-Telecom for a total consideration of RUB70.65 billion (USD970 million). The group’s press release notes that Service-Telecom is a well-established partner of its Russian mobile operating subsidiary Beeline (PJSC VimpelCom) and already provides the company with passive infrastructure across various regions of the Federation. The transaction is subject to customary regulatory approvals and closing is expected in the fourth quarter of 2021.

The group added: ‘The sale reflects VEON’s continued focus on active portfolio management and the pursuit of opportunities to realise the value of its infrastructure portfolio … The transaction involves the sale of 100% of National Tower Company (NTC), a subsidiary of VEON, which operates a portfolio of approximately 15,400 mobile network towers in Russia. All of the active mobile network infrastructure currently operated by PJSC VimpelCom and the majority of the rooftop towers will remain with the company. Under the terms of the deal, PJSC VimpelCom and Service-Telecom have entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of eight years, and multiple extensions of eight years at the discretion of PJSC VimpelCom. Both parties will additionally enter into a new build-to-suit programme comprising of up to 5,000 sites by 2029. The master agreement provides a framework for a long-term strategic partnership with Service-Telecom to pursue investments in network rollout and upgrade, and share the benefits from potential future infrastructure market consolidation in Russia. The agreement also provides Beeline with strict service commitments and protections enabling Beeline to place an even greater focus on ongoing strategic initiatives and improve the quality of mobile services for its customers.’

Russia, Beeline (Russia), Service-Telecom, VEON