Telefonica has scrapped plans to launch an initial public offering (IPO) of its infrastructure division Telxius due to inadequate demand from investors. Telxius operates around 16,000 towers in Europe and Latin America and more than 65,000km of submarine fibre-optic cables worldwide – 31,000km of which are owned by the company. The Spanish group said in a statement last week that it would ‘continue analysing strategic alternatives’ for the division. Bloomberg writes that investors had balked at the asking price of EUR12-EUR15 (USD13.5-USD16.8) per share, and that Telefonica and its advisers had considered lowering the price range or reducing the size of the deal but ultimately chose to cancel the offering. Telefonica had previously planned to launch an IPO for Telxius earlier this year but postponed the listing amidst the market turmoil following the UK’s decision to leave the EU in June.
Staying with Telxius, the passive infrastructure firm has signed an agreement with regional full service provider Euskaltel, under which the operator will have access to Telxius’ 11,000 towers in Spain. The deal includes a commitment to use a minimum of 100 towers and will enable the operator to expand its 4G footprint more quickly and efficiently.
American Tower Corporation (ATC) is interested in following up its purchase of Viom Networks in April this year with more acquisitions in India, the group’s chairman and CEO James Taiclet was quoted by the Economic Times as saying. The executive explained that tower valuations in India are currently lower than the rest of the world and will stay that way until master lease contracts are brought in line with global standards: for example, it purchased Viom at a valuation of around eleven times its operating profit, compared to the norm of roughly 19 times. The Indian market was initially shaped by deals between captive operators and their parent companies – such as Bharti Infratel and Bharti Airtel – and as a result the agreements included many clauses that weaken tower companies’ ability to cap and scale their business, Mr Taiclet added. Nevertheless, ATC remains optimistic about its operations in India, particularly following the current round of spectrum auctions, when investment is expected to be refocused on network expansion.
Spanish-based infrastructure group Cellnex Telecom has agreed to purchase 100% of Shere Group from Arcus Infrastructure Partners for EUR393 million. The acquisition includes Shere’s portfolio of 1,004 mobile sites in the Netherlands (464) and the UK (540), with the takeover of the latter marking Cellnex’s entry into its fifth European market.
Cellnex expects the integration of Shere’s assets to provide additional revenue of around EUR29 million per year. The new sites in the Netherlands have a tenancy ratio of 2.7 and will be added to Cellnex’s existing network of 261 sites, whilst the UK sites have a tenancy ratio of 1.6. Cellnex CEO Tobias Martinez commented on the deal: ‘With the UK we are not only bringing on board another European country, further bolstering the geographical continuity of the markets in which we operate, but we are entering a particularly significant and dynamic market for the infrastructure operator sector since the management of these sites involves a high degree of outsourcing.’
British cellular and broadcasting infrastructure provider Arqiva booked turnover of GBP884.7 million (USD1.15 billion) and EBITDA of GBP424.4 million in the twelve months ended 30 June 2016. The company registered a 6.1% increase in revenue from its telecoms and machine-to-machine (M2M) business, with turnover from the latter growing by 84.0%, driven by the rollout of networks in ten major cities, mainly to support smart metering for water and energy. Arqiva noted that it had seen a substantial increase in activity relating to the deployment and upgrade of sites, with the operator claiming to have 3,250 sites in service by end-June 2016. Commenting on the results, CEO Simon Beresford-Wylie said: ‘In the last year we have aligned the way we work to better reflect market developments; enhancing customer focus and strengthening our ability to deliver complex projects. We have focused our investment in the right opportunities and projects such as small cells to support 4G and, in the future, 5G growth.’
Newcomer to the Indian mobile sector Reliance Jio Infocomm (RJIL), a subsidiary of petrochemical giant Reliance Industries (RIL) has signed a Master Services Agreement (MSA) for tower infrastructure sharing with passive infrastructure firm GTL Infrastructure to help facilitate its nationwide launch of mobile voice and data services. Details of the deal were not disclosed, although the Economic Times cites a person familiar with the matter as saying that RJIL will initially rent 2,000 towers from GTL, with a further 8,000 to be added over the subsequent six to eight months. GTL’s portfolio comprises more than 27,800 sites across all 22 circles, and the operator booked turnover of INR2.32 billion (USD34.78 million) in the three months ended 30 June 2016, up from 2.30 billion in the corresponding period of 2015. Net loss for the period, meanwhile, dropped to INR1.35 billion from INR2.10 billion a year earlier.
VimpelCom has reportedly found a buyer for its tower assets in Russia, which it spun off into a new independent firm, dubbed National Tower Company in April 2016. Vedomosti cites several sources as saying that a sale had been agreed following a tender, with one person close to the deal naming Russian Towers as the buyer. The portfolio is understood to comprise between 10,000 and 12,000 towers and the Amsterdam-based group was previously reported to be seeking around USD500 million for the sites.
In a related development, Cnews reports that Russian Towers has signed a cooperation agreement with the Moscow regional government, under which the duo will work together on developing telecom infrastructure in the Moscow region, with a view to increasing coverage and improving the quality of mobile services.
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