Having secured network sharing agreements in several key markets, Vodafone Group this week announced that it is proceeding with plans to monetise a substantial proportion of its European tower infrastructure during the next 18 months.
Vodafone has recently announced active and passive network sharing agreements in Italy, Spain and the UK, and will continue to pursue similar arrangements across its European footprint in order to capture the sizeable industrial benefits prior to monetisation of its tower infrastructure. Vodafone legally separated its passive tower assets in order to create a new TowerCo organisation with a dedicated management team, which will be operational by May 2020.
TowerCo will own Europe’s largest tower portfolio, comprising approximately 61,700 towers across 10 countries, with 75% of these sites in the major markets of Germany, Italy, Spain and the UK. Based on market benchmarks for anchor tenant lease rates, existing third party revenues and the attributable cost base, TowerCo could generate proportionate annual revenue and EBITDA of around €1,700 million and €900 million, respectively.
Vodafone intends to monetise a substantial proportion of TowerCo over the next 18 months, depending on market conditions. The ultimate form of monetisation may include an IPO or disposal of a minority stake in TowerCo, as well as potential disposals of minority or majority stakes at an individual country level.