Europe news

A roundup of tower news across Europe

CIS: Teasers out for VimpelCom’s Central Asian towers

Teasers are out for the sale of 12,400 VimpelCom towers in Central Asia, with TAP Advisors believed to be running the process. With 4G only rolled out to half the population in Kazakhstan, Armenia and Georgia, and with the Ukraine still lagging in 3G rollout, demand for data will soar and demand for points of service in these markets could double in the next ten years. And with few existing towercos in the region, VimpelCom’s process could inaugurate a new era of shared infrastructure in Eurasia.

France: Bouygues Telecom announce third deal with Cellnex

Bouygues Telecom have announced a third deal with towerco partners Cellnex, this time to add a further 3,000 sites to Cellnex’s French portfolio.

The deal is structured in two stages: firstly, the acquisition of up to 1,800 urban sites in France for a total value of €500mn, with these sites incorporated gradually over the next 24 months. Secondly, the two partners have agreed on the building of up to 1,200 new towers for a total value of €354mn. These new towers will be incorporated and operated by Cellnex France as they come online between 2017-2022. Once the incorporation of the 3,000 sites into Cellnex France is completed, they are expected to generate annual EBITDA of approximately €61mn on a run rate basis excluding synergies.

Cellnex CEO Tobias Martinez called the deal a ‘decisive step’ for Cellnex ‘further extending its footprint into Europe’

France: ATC Europe announces closure of FPS deal

American Tower announced that it spent approximately $512 million in Q1 2017 to acquire nearly 2,500 sites, primarily through ATC Europe’s acquisition of FPS Towers in France, which closed on February 15, 2017.

Italy: INWIT has announced a decrease in number of towers (11,100 to 11,000) as their decommissioning programme continues, with an according increase in tenancy ratio from 1.72 to 1.75 since Q416. INWIT reports revenues up 5.8% and EBITDA up 13.9% YOY to €86.4mn and €44.3mn respectively, thanks in no small part to initiatives to reduce site costs, in particular rental costs.

Italy and Spain: Cellnex and JCDecaux partner for small cells and DAS rollout

Cellnex has signed a deal with outdoor advertising giant JCDecaux to speed up the roll-out of small cells and DAS in Italy and Spain. The plan involves working together from design to maintenance while streamlining site acquisition. The deal has the scope to include all urban furniture including advertising supports and bus shelters and will help to simplify local planning regulations for both parties. The deal will will deliver fibre or microwave connectivity to JCDecaux’s sites as well as reducing opex for both parties in operations and maintenance.

Ireland: Cignal acquires Cellcom

Cignal has acquired a ‘number’ of independently held multi-site portfolios, rumoured to include Irish towerco Cellcom, adding in excess of 30 new towers to their portfolio.

Colin Cunningham, CEO at Cignal said “This is a further commitment to our ongoing investment in telecoms infrastructure to support the Irish wireless telecoms Industry. We are delighted, through these acquisitions, to expand our portfolio of telecoms infrastructure in Ireland which in turn enables us to broaden our relationships with our new and existing customers. While we remain focused on growing our portfolio through the acquisition of existing portfolios and sites we also have plans to make investments to deliver new infrastructure in order to enhance the delivery of mobile and wireless broadband coverage to areas not served today.”

Russia: Russian Towers acquires Sektor

Russian Towers has acquired Sektor, a small Russian towerco which owns antenna-mast structures in the Moscow, Kirov and Tver Regions. All of Russia’s four main MNOs have equipment installed on these sites, with an average tenancy ratio of more than 1.5 per site.

‘Russian Towers provides a high-quality service to network operators, who install their equipment on acquired sites’, says Alexander Chub, president of Russian Towers. ‘We continue to realise our program for regional development and in the future, we plan to increase our influence in regions of Russia, expanding our territorial reach, as well as the density of our site distribution’.

Spain: KKR buys a 40% stake in Telefónica’s Telxius for €1.275bn

Telefónica has sold 40% of its infrastructure business, Telxius, to private equity group KKR in a deal worth €1.275bn. The agreement includes an initial acquisition by KKR of 62mn shares (24.8% of the total) for €790mn, then an option to acquire an additional 38mn shares (a further 15.2%) for at least €485mn, The deal with KKR implies an enterprise value for Telxius of €3.678bn and an equity value of €3.188bn.

Telxius’ portfolio includes around 16,000 telecommunications towers in five countries of which 11,000 are in Spain and 2,350 in Germany as well as 65,000km of subsea fibre-optic cables. Telefonica tried to float Telxius on the stock market in September, but pulled the IPO after it failed to achieve the desired valuation. Potential investors were also put off by the inclusion of the cabling business in the offer, an asset with a very different investment profile from tower companies.

The deal won’t make a huge dent in Telefonica’s €50bn debt but the sale of the Telxius stake will increase speculation that the telco could revive talks to sell a minority stake in O2 to a private equity fund rather than pursuing a listing.

Spain: Cellnex posts revenues of €707mn in 2016

Cellnex’s 2016 performance has largely exceeded market expectations with a reported income of €707mn (an increase of 15% on 2015) and EBITDA of €290mn (up 23%). Cellnex have also diversified the business over the last 12 months with 55% of revenues coming from telecoms infrastructure, 33% from broadcasting and 12% from network services and 36% of revenue being generated outside of Spain. Cellnex’s net debt is €1.499bn (annualized debt/EBITDA 4.6x) and share performance on the stock market is up 18% versus the IBEX 35 since May 2015.

Switzerland: Sunrise to divest 2,000 towers

Swiss operator Sunrise is believed to be well underway with a process to divest around 2,000 towers, mostly ‘stub towers’ based on rooftops, to an independent third party. Cellnex, ATC Europe, Digital Bridge, SBA Communications and Global Tower are all rumoured to have shown an interest in the deal.

UK: Arqiva up for sale

British infrastructure owner Arqiva is understood to be up for sale with a price tag between £5bn and £6bn. The mobile and broadcast towerco, owned by a consortium including Macquarie and the Canada Pension Plan Investment Board, have appointed Rothschild to run the process. Hopes of an IPO have faded due to complications around Arqiva’s £3bn debt pile, but interest in an acquisition is high. Interested parties are said to include CKI (the Hong Kong-listed holding company controlled by Asia’s richest man Li Ka-shing) GIC  (Singapore’s sovereign wealth fund), US private equity giant KKR, Ted Miller’s 4M Investments and Germany’s Allianz (part of last year’s winning consortium in the £11bn battle for National Grid’s gas distribution network).

Among potential trade buyers, Arqiva’s French equivalent, TDF, controlled by Brookfield, is believed to be interested, as well as Spanish towerco Cellnex, who acquired 540 towers in the UK last year as part of their acquisition of Shere Group.

UK: CTIL wins bid to provide connectivity solutions in City of London

The City of London has announced that CTIL has been awarded a 15 year contract in conjunction with O2 to deliver a free, public access WiFi network, offering internet access anywhere within the Square Mile. The multi million pound project is one of the largest investments in wireless infrastructure ever seen in London.

CTIL will build 4G mobile small cells, which will be housed on City street furniture such as lampposts, street signs, buildings and CCTV columns to provide enhanced mobile coverage at street level, and ensure that the City is best placed to become an early adopter of 5G as it rolls out from 2018. CTIL will also partner with O2 in building a WiFi network which will be free for the public to use.

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