Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.
 
The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future&”…

Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.

The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future” as part of the deal, noting that the tower company’s EBITDA for the 2023 financial year is $51 million.

According to sources, the tower sale could be worth up to $1 billion.

Vodafone NZ said that the deal will be beneficial for customers by bringing “more focused investment to the active mobile network assets”, as well as having major benefits for the company’s efficiency and environmental impact.

The announcement should not come as too great a surprise. Investor appetite for mobile towers has been surging around the world for a number of years now, with firms viewing the infrastructure as a reliable long-term investment delivering predictable returns. Meanwhile, operators are keen to offload these passive assets in exchange for cash, helping to lower their debt and fund the further expansion of their expensive 5G and fibre networks.

This trend has certainly been seen in neighbouring Australia, where both Telstra and Singtel have sold all or part of their mobile towers last year.

Indeed, the sale of the Vodafone NZ towers has been rumoured for weeks with Infratil, who owns half of Vodafone NZ alongside Canada’s Brookfield Asset Management, saying in a recent investor call that it was exploring the “possibility of network capital release options”.

« As the necessary infrastructure to support digital economies grows in importance, and as telecommunications companies look to unlock value that can be reinvested, separate ownership of passive mobile tower assets has become increasingly common, » said Vodafone NZ in a statement. 

Vodafone NZ’s rival, Spark, said just last month that it was exploring its own ‘TowerCo’ spin off.

But while these tower deals are becoming increasingly popular, the handing over of towers is not always an easy process. Back in 2020, CK Hutchison announced that it would sell all of its European towers to Spanish infrastructure giant Cellnex for roughly €10 billion. But, while the transition of assets went smoothly in most of the company’s European markets, the deal came under severe scrutiny in the UK market, where the Competitions and Markets Authority (CMA) suggested the deal was uncompetitive and would leave Cellnex in too dominant of a position within the market. 

Also in the news:

The final regulatory hurdle to Cellnex acquiring more than 24,600 CK Hutchison’s sites in six European countries has been given approval. The series of agreements first announced in November 2020 covered Austria…

The final regulatory hurdle to Cellnex acquiring more than 24,600 CK Hutchison’s sites in six European countries has been given approval.

The series of agreements first announced in November 2020 covered Austria, Ireland, Denmark, Sweden, Italy and the United Kingdom and had originally been obstructed by the UK Competition and Markets Authority (CMA) who said that the original UK deal would lead to a “substantial lessening of competition in the supply of access to developed macro sites and ancillary services to wireless communication providers in the UK.”

The CMA has now approved the Cellnex acquisition of CK Hutchison’s 6,000 passive telecom infrastructure sites in the UK, subject to the divestment of around 1,000 of existing UK sites which overlap geographically with the CK Hutchison sites to be acquired.

Now that the deal can progress, it equates to an investment of around €10 billion and will incorporate addition of 600 new sites in the UK as part of up to 5,250 new sites being added across the six countries over the next eight years.

Cellnex CEO Tobias Martinez commented: “The combined agreements with CK Hutchison not only strengthen our position as a key pan-European operator, but also reinforce our partnerships with our customers and open up new opportunities and approaches for collaboration. Fundamentally, this rationalisation of infrastructure will create the required incentives to unlock, improve and extend mobile coverage, including 5G, across these key markets.”

You can meet Cellnex at Connected Britain on the 20-21 September 2022. Find out more HERE

David McCourt, Chairman of National Broadband Ireland gave a stark warning to the U.S., « If the U.S. doesn’t provide universal access, it will ensure that the Americans who are already struggling to compete in the global economy will fall further behind& »…

David McCourt, Chairman of National Broadband Ireland gave a stark warning to the U.S., « If the U.S. doesn’t provide universal access, it will ensure that the Americans who are already struggling to compete in the global economy will fall further behind ».

McCourt who is also the inaugural Economist in Residence at USC’s Annenberg school, was writing on the Nasdaq, Inc. website and said that it is now time for the U.S. to follow Ireland’s lead by embracing a comprehensive, inclusive, and technologically-forward broadband plan to ensure every American – rich or poor – has access to the internet.

Today, about 25% of Americans don’t have access to broadband at home, but studies, such as that completed by Deloitte into the US Digital Divide, have shown that a 10% increase in broadband access could result in 875,000 new jobs and $186 billion in economic output.

McCourt further went on to argue for an independent provider to build a broadband infrastructure for all Americans in an equitable manner, suggesting that the likes of like Verizon and AT&T have failed the American public as they have sought to pursue their own business interests.

Biden’s Infrastructure Investment and Jobs Act has seen $65 billion allocated to broadband expansion. It has never been a more interesting time to explore the development of a #ConnectedAmerica. Sign up to the dedicated Total Telecom America newsletter HERE