Spark to retain shareholding in new TowerCo

12 Apr 2022

Spark New Zealand has launched a process to explore the introduction of third-party capital in its mobile network infrastructure spinoff, dubbed Spark TowerCo, comprising approximately 1,263 sites. The company intends to retain a shareholding in the new business and become a key, long-term anchor tenant and strategic partner. Forsyth Barr and Jarden have been appointed to undertake the market engagement process, although there is no certainty that a transaction will proceed, Spark noted.

The move, first announced in late February, appears to have been motivated in part by the expected rapid change and densification required in the network as it moves beyond 5G, which is still being deployed. ‘The infrastructure build programmes needed to support New Zealand’s increasing data needs and new technologies like 5G, and potentially 6G in the future, will be very different from the build programmes of today – requiring many more, smaller sites, closer to the end customer, and greater overall densification,’ explained Stefan Knight, Spark Finance Director, adding: ‘Spark TowerCo will have a sole focus on passive mobile assets so will be able to achieve greater focus, service innovation, and efficiency, reducing costs and increasing speed to market for these build programmes.’

According to the operator, Spark TowerCo is projected to generate EBITDA in the 2023 financial year of around NZD35 million (USD23.9 million) with a strong growth profile over the next decade. Although Spark owns about 1,500 towers, the transaction will exclude about 250 sites related to co-location on third-party owned infrastructure.

Rival Vodafone New Zealand, which owns nearly 1,500 towers, last month appointed UBS and Barrenjoey as advisers for the sale of its passive tower assets.

New Zealand, Spark