VEON gets FAS approval for tower sale; MTS negotiating similar divestment

17 Nov 2021

Multinational telecoms group VEON has received permission from the Federal Antimonopoly Service (FAS) for the sale of its Russian tower infrastructure to Service-Telecom, Telecom Daily reports. As previously reported by CommsUpdate, in early September VEON sealed the agreement to sell mobile network towers to Service-Telecom – a well-established partner of its Russian mobile operating subsidiary Beeline (PJSC VimpelCom) – for RUB70.65 billion (USD970 million), with the transaction expected to close in 4Q21. The deal involves the sale of 100% of VEON’s subsidiary National Tower Company (NTC) which operates approximately 15,400 towers, while all active mobile network infrastructure currently operated by Beeline and ‘the majority of rooftop towers’ will remain with the cellco. Beeline and Service-Telecom also 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 Beeline’s discretion. Both parties will additionally enter into a new build-to-suit programme comprising of up to 5,000 sites by 2029.

In a similar vein, Russian cellular market leader Mobile TeleSystems (MTS) is currently in negotiations to sell its tower assets, reports Reuters quoting comments made by MTS’ CEO Vyacheslav Nikolaev to Russian newspaper Kommersant. Nikolaev said: ‘The process of separating tower assets into a separate company is underway, after which a sale is possible,’ adding that negotiations for a proposed sale were ongoing, while highlighting that MTS would have around 23,000 towers by the end of 2021. The CEO also underlined that MTS had other priorities beyond core telecoms services, as the group diversifies into areas such as MTS Bank, e-commerce and streaming service KION. As previously reported by CommsUpdate, last month MTS’ shareholders approved a series of group reorganisations including the separation of MTS’ passive infrastructure (towers and related assets) into a wholly-owned subsidiary, Tower Infrastructure Company (TIC).

Russia, Beeline (Russia), Mobile TeleSystems (MTS), Service-Telecom, VEON