Regional: Cellnex acquires 10,700 sites in France, Italy and Switzerland, plus deal for 4,000 built-to-suit
On Tuesday 7th May Cellnex announced a raft of new deals. Cellnex will acquire 5,700 sites in France currently operated by Free, the French Iliad-owned MNO. Cellnex will pay €1.4bn for a 70% controlling stake of the new company that will operate the 5,700 sites acquired from Iliad in France. In Italy Cellnex will also acquire 2,200 sites from Iliad, paying €600mn for 100% ownership and control. In Switzerland, Cellnex has also reached an agreement with the MNO Salt to acquire its 2,800 sites. Cellnex is paying €700mn and will control 90% of the new company that will operate the sites. In addition to these sale and leaseback transactions, the agreements also foresee built-to-suit programmes in the three countries between 2020 and 2027 including up to 2,500 new sites in France, up to 1,000 new sites in Italy, and up to 500 sites in Switzerland. Cellnex estimates that by 2027 it may invest a total of €1.35bn in the 4,000 BTS sites. The deals are subject to the usual regulatory approvals, but upon completion Cellnex will have over 34,000 towers and DAS nodes in six European countries. Including acquisitions and BTS to 2027 the deals would increase Cellnex’s EBITDA run rate by €510mn.
General: Cellnex added to the MSCI Europe index
Cellnex Telecom shares (ticker: CLNX) have been added to the MSCI Europe index, following the May 2019 semi-annual index review. Previously, Cellnex had been a constituent of MSCI Europe Small Cap Index but following the recent acquisition of 10,700 sites in France, Italy and Switzerland the company’s size has boosted it into the main index. The MSCI index is used by several passive funds to identify stocks to own for investors who wish to track certain portfolios. Cellnex is listed on the Spanish stock exchange and is part of the selective IBEX 35 and EuroStoxx 600 indices. It is also part of the FTSE4GOOD and CDP (Carbon Disclosure Project), “Standard Ethics” and Sustainalytics indexes. Cellnex’s reference shareholders include ConnecT, with a 29.9% stake in the share capital, as well as CriteriaCaixa, Blackrock, Canada Pension Plan and Wellington holding smaller stakes.
Czech Republic: Ceske Radiokomunikace to come to market
Following reports that Macquarie was preparing Slovakian Towercom for sale in 2018, Czech news outlets are now reporting that they are preparing Czech asset, Ceske Radiokomunikace, for sale. With around 800 towers, Ceske Radiokomunikace is the biggest radio and television broadcasting network in the country, with telecoms tenants across the portfolio. Buyers are thought to include PPF Group, who own the largest towerco in the Czech Republic, CETIN, and are currently
France: Whittling down to a shortlist of prospective TDF buyers
Back in May, Bloomberg cited anonymous sources suggesting bidders for French broadcast and wireless towerco TDF were down to a shortlist including serial tower investors Macquarie, digital infrastructure aggregator Digital Colony, Antin Infrastructure Partners, which formerly owned of FPS Towers in France, and American Tower, to whom Antin sold FPS Towers. TowerXchange also reported in April that Cellnex very interested in the sites.
France: Orange rumoured to be reviewing infrastructure ownership strategy
Unconfirmed rumours continue that Orange is reviewing the status of several infrastructure assets on its balance sheet, including towers. One of Europe’s largest MNOs with a footprint across France, Spain, Belgium, Luxembourg, Germany, Poland, Slovakia, Moldova, Romania, Ireland and the UK, where they are a 50% shareholder in EE. Orange has agreed active infrastructure sharing deals in Spain, Poland and Romania, and has partnered with Three to create MBNL in the UK. While Orange has partnered with independent towercos in Africa, agreeing ‘manage with license to lease’ deals with IHS in Cameroon and Cote d’Ivoire and selling towers to Eaton Towers in Uganda and Egypt, the MNO has not yet extended their passive infrastructure monetisation strategy to Europe. Orange retains the last substantial captive tower portfolio in France, with around 15,000 towers in the country.
France: Altice closes FTTH unit transaction
Altice Europe has closed a deal to sell a 49.99% stake in new FTTH unit SFR FTTH to an OMERS Infrastructure-led consortium which also includes Allianz Capital Partners and AXA Investment Managers. The deal is worth €1.7bn for a unit which aims to cover five million homes in France over the next four years with a specialism in the design, construction and operation of telecoms infrastructures for local government in less densely populated areas of France.
Germany: Vodafone LTE rollout ahead of schedule
Vodafone Germany has added an additional 1,300 LTE antennas across Germany so far this year, including 600 new sites. Vodafone is aiming to commission a total of 2,800 new LTE stations to extend 4G into new areas in Germany, reaching three million Germans with LTE so far in 2019 alone.
Italy: INWIT to absorb ~11,000 Vodafone Italy towers
TIM and Vodafone have reached agreement on merging their tower portfolios within towerco INWIT. Each has around 11,000 towers, INWIT with a tenancy ratio of 1.9x, Vodafone with 1.6x, with a 1.75x combined tenancy ratio, pre-synergies. TIM and Vodafone already have a deep infrastructure sharing agreement, which accounts for many of the existing co-locations, as well as a RANsharing agreement. The combined towerco would also take the lead in new site deployment, including small cells and DAS, and decommissioning of overlapping sites. The agreement is expected to be signed in Summer 2019.
Italy: Wind Tre bringing ~7,000 towers to market
Italian MNO Wind Tre, created through the merger of CK Hutchinson’s Tre (Three) and VEON’s Wind, has carved out it’s ~7,000 towers into a newco Pisa, with a view to selling a 49% stake in the business, in part to fund its €6bn 5G network upgrade plan. Wind tre are beginning their Vendor Due Diligence to report on the financial health of the tower portfolio with the aim of improving the price of their asset.
Italy: French Vivendi reiterates commitment to Telecom Italia
Telecom’s main shareholder Vivendi has reconfirmed its commitment to the Italian mobile network operator. According to Reuters, the company’s executive chairman Arnaud de Puyfontaine said he is confident of achieving success in Italy, adding that Vivendi needs to be patient in its Italian ambitions, saying ‘Rome was not built in a day’.
Vivendi has been involved in conflict with TIM’s new shareholder, Elliott Advisors, who are keen to pare the operator back to a retail model, resulting in attempts to change the company’s board in April.
Latvia: BITE planning infrastructure upgrade
Latvian MNO Bite is planning to spend €4.5mn on network development in 2019 in order to support a targeted 53% increase in capacity. This will include deploying 50 new base stations as well as upgrading a further 100 sites. With a current total of 810 base stations in Latvia, this represents a significant commitment to improving capacity.
Spain: 5G network sharing deal for Orange and Vodafone
Following Vodafone’s agreement to collaborate more closely with Telecom Italia for 5G rollout, Vodafone has announced an extension of their 2006 network sharing deal with Orange in Spain. The agreement applies to rural and suburban areas, with both MNOs pursuing their own network strategy in large cities, as well as maintaining responsibility for their own spectrum and core networks.
Spain: Spanish tower sale continues
Bids have now been received for Regional Spanish towerco Telecom-CLM (Telecom Castilla-La Mancha), in a process run by Dutch bank ING. Telcom-CLM owns and operates broadcasting towers available for telecoms colocation in Madrid and the central parts of Spain, and is currently owned by private equity investor GED Capital.
UK: Cellnex partners with BT to lease up 220 high towers
Cellnex has secured the marketing and operating rights for 220 high towers owned by BT in the UK. Previously used primarily as broadcasting and transmission sites, the towers are also being used to co-locate wireless equipment. The deal is not structured as a sale and leaseback, but it does fix “the fundamentals for a long strategic partnership with BT” for Cellnex, as revealed in an exclusive interview about the deal with Ester Fernandez, UK Country Manager for Cellnex, later in this Journal. The partnership will increase the scale of Cellnex’s UK portfolio to over 820 sites.
UK: Vodafone project Skylon remains secretive
Under project Skylon, Vodafone has been reviewing whether to retain or sell minority or majority stakes in approximately 55,000 towers across Europe. Sources suggest the project is moving slowly, and few details have emerged to date beyond growing speculation that a minority stake in Cornerstone could be sold, and the reaching of agreement to fold Vodafone’s Italian towers into TIM’s towerco INWIT.
UK: New rural infraco joint venture proposed between EE (BT), Vodafone, O2 and Three
Subject to the approval of UK regulator Ofcom, the UK’s four leading MNOs have agreed to create a new infrastructure sharing company to improve the economics of rural connectivity. The “single rural network” would manage the sharing of existing masts and the building of new masts. The theory is that the new infraco would be funded both by over half a billion pounds of MNO investment, and by a £200mn reduction in license fees paid by MNOs.
The UK government has targeted 95% geographic coverage in the UK by 2022, whereas 4G coverage currently stands as low as 67%.The MNOs suggest that their single rural network plan would bring national coverage up to 88%.
UK: Digital Colony makes third small cell acquisition
Digital Colony, who acquired UK small cell and indoor connectivity businesses Stratto and OpenCell in 2018, has announced another UK acquisition in the form of iWireless Solutions, a leading small cell service provider that delivers wireless connectivity solutions to some of the largest and highest profile venues in the UK.
Digital Colony anticipates that iWireless Solutions will complement and bring outdoor small cell capabilities to StrattoOpencell, which delivers carrier-grade multi-operator indoor coverage to over 120 connected buildings, using over 2,700 cells. The acquisition of iWireless Solutions brings extensive outdoor connectivity experience including in the City of London, London Olympic Stadium, Twickenham Stadium, and other major outdoor UK venues.
“We have always championed small cells, and there is a growing industry consensus that they will be a crucial component in delivering mobile coverage, both inside and outdoors, for today’s networks and even more so as we enter the 5G era,” said Graham Payne, CEO of Digital Colony’s UK digital infrastructure platform. “We are delighted to welcome Ravi and the entire iWireless Solutions team to the family, their first-class approach to service integration, optimisation and radio network design is kindred to StrattoOpencell’s and will do a lot to further strengthen our deep mobile network operator relationships and outdoor small cell offerings.”