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According to Spanish media, American Tower and Brookfield Asset Management are reportedly considering acquiring Cellnex, Europe’s largest mobile tower operator

Mobile towers have always been an attractive prospect for investors, with their low operational costs and steady long-term returns denoting them as relatively low risk. In recent years, however, investor appetite for infrastructure has reached unprecedented heights, prompting enormous consolidation worldwide, particularly in Europe and Africa.

In many ways, this activity has been driven by the broader state of the telecoms industry as a whole. Network operators are currently in the process of rolling out expensive 5G and fibre networks, while at the same time seeing . As a result, offloading their passive infrastructure becomes an appealing proposition, with major telecoms groups like Orange and Vodafone spinning off their tower units into independent companies.

Throughout this global consolidation, Spanish infrastructure giant Cellnex has emerged as one of the voracious of all towercos, buying up a huge amount of European assets, including a €10 billion deal to purchase all the European towers belonging to CK Hutchison. It is currently the largest independent tower company in Europe, with over 130,000 thousand sites in 12 markets.

In the last year, however, the global economy has taken a turn for the worse. With interest rates on soaring, the debt used to finance Cellnex’s enormous acquisitions will need to be refinanced at a higher rate, cutting painfully into the company’s bottom line.

In November last year, Cellnex announced that its insatiable M&A spree was officially over, with CEO Tobias Martínez saying that the company now needed to “face and beat inflation”.

The company has net debt of €17.1 billion and is seeking to reduce its leverage from roughly eight-times its earnings before interest, tax, depreciation and amortisation (EBITDA) to below seven-times.

The company’s share price has fallen almost 40% over the last year, presumably a major factor in the resignation of Martínez as CEO two weeks ago.

Now, rumours suggest that this lowered share price is attracting attention from potential rivals, with Spanish media suggesting that American Tower and Brookfield Asset Management are considering a joint takeover bid.

While no financial details were mentioned, analysts suggest that such a deal would be worth around €50 billion.

Cellnex, American Tower, and Brookfield have all refused to comment, while other media sources have cited other unnamed sources refuting the rumour.

It should go without saying that if such a takeover were to materialise, it would have enormous implications for the European mobile market, making the combined entity a dominant force in markets like the UK, France, and Spain.

As a result, various regulatory bodies would closely investigate such a tie up, with American Tower surely forced to offload a significant amount of its own towers that overlap with Cellnex’s portfolio, at the very least.

This would be nothing overly surprising ­– Cellnex itself has already shown a willingness to pursue this sort of compromise, offloading some of its overlapping towers in the UK in order to gain clearance for its acquisition of CK Hutchison’s towers in the market.

But perhaps the largest obstacle to such an acquisition is not some regulatory complexity, but simply cash. While American Tower and Brookfield could, at a stretch, likely afford such a giant investment, they would surely need a hugely favourable valuation of Cellnex to truly consider such a purchase.

With Cellnex already taking steps to consolidate their position, reduce debt, and encourage organic growth, the company will surely argue that the company is undervalued, making reaching an amiable takeover agreement unlikely.

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The solar-powered Zephyr drone will serve as a flying base station, delivering mobile connectivity to customers in hard-to-reach areas

Today, aviation giant Airbus has revealed that is seeking external investment as it prepares to scale up, spin-off, and commercially launch its Zephyr drone connectivity business.

Flying around 21km above the surface of the Earth, high above weather and commercial aircraft, Airbus’s Zephyr drone will act as a High-Altitude Platform Station (HAPS), beaming down connectivity to customers too difficult or expensive to reach with terrestrially technology.

The solar-powered drone can remain airborne for months at a time and be piloted directly to in-need locations, whether remote areas lacking in traditional connectivity or areas with high temporary demand, such as those struck by natural disasters.

In addition to Zephyr’s connectivity capabilities, the device’s payload is also modular, allowing it to carry cameras and other sensors for observational purposes.

Airbus has been working alongside Japanese operator NTT and other partners to develop this technology for some years now, with the device having already racked up over 3,000 flight hours by the end of 2021.

By last summer, Zephyr had made significant technical advances, recording a single continuous flight for 26 days, breaking the record for the longest flight by an unmanned aircraft.

When complete, Airbus said it hopes each Zephyr drone will be able to fly continuously for up to six months using the latest solar and battery technologies.

Airbus officially launched its own HAPS Services Business unit last year, aiming to further develop Zephyr technology and target the 3.7 billion people current severely underserved by existing connectivity infrastructure.

Now, however, it seems that Airbus feels the unit will function better as an independent business, with the aviation giant having hired Morgan Stanley to help find and onboard new investors to help rapidly grow the fledging business.

This new unit will be called Aalto.

“Airbus is not a company that offers telecom services,” Samer Halawi, the CEO of Airbus’s HAPS business, told the Financial Times. “The idea of the carve-out is to bring like-minded partners to the equation and to be able to scale this business.”

According to reports, Airbus intends to retain majority control of the business, with talks with various customers and commercial partners already underway.

Halawi says that Zephyr is now “at the final design stage”, with commercial services expected to launch before the end of the year.

As part of the commercialisation process, Aalto expects to set up five or six ‘Aalto ports’ in locations including the US and the Middle East, each of which will serve as a base of operation for Zephyr drones.

How is the rise of non-terrestrial connectivity solutions impacting the traditional telecoms sector? Join the operators in discussion at this year’s Connected America conference

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According to the operator, the data of 37 million customers has been compromised

Today, US mobile giant T-Mobile has announced it has been hit by another cyberattack, resulting in the data of 37 million customers being accessed by a malicious actor.

The breach was reportedly identified on January 5, with the operator saying they had removed the attacker’s access to the data within 24 hours.

“Our investigation is still ongoing, but the malicious activity appears to be fully contained at this time, and there is currently no evidence that the bad actor was able to breach or compromise our systems or our network,” said the company in a statement.

T-Mobile was quick to play down the severity of the attack, noting that no sensitive data, such as financial information, was compromised. Instead, the operator said that the information stolen was “basic” and “the type widely available in marketing databases or directories”.

Basic or not, this data does include details such as names, dates of birth, and account numbers.

The Federal Communications Commission (FCC) has initiated an investigation into the breach.

It is worth noting that this is not the first time in recent memory that T-Mobile has been hit with a major cybersecurity scandal.

In 2021, the operator reported a breach that had compromised data relating to 76.6 million customers. One year later, the FCC fined operator $350 million and stipulated they must spend a further $150 million on additional cyberdefense measures.

In somewhat related news, the FCC is currently in the process of updating its data breach reporting rules, aiming to have telcos notify customers earlier when their data has been compromised.

Want to keep up with all of the latest news from the US telecoms sector? Join the experts in discussion at this year’s Connected America conference

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