5G and Beyond

Deutsche Telekom, Vodafone send each other tower partnership signals

Deutsche Telekom CEO Tim Höttges, once again, has expressed an interest in doing something with the Group’s tower assets (other than just sitting on them as it has so far).

"I'd love to have an industrial partner and I'm willing to deconsolidate," he told a Morgan Stanley European Technology, Media and Telecoms (TMT) conference, as reported by Reuters.

Höttges reiterated his view that he didn’t care for an IPO and selling a minority stake (the route taken by Vodafone with Vantage Towers), and that he wanted to retain some control in decision-making following any deal.

Cell tower on a house roof in Germany. Worker stands on a lifting platform and works on an antenna mast.  (Source: pa picture alliance / Alamy Stock Photo)
Cell tower on a house roof in Germany. Worker stands on a lifting platform and works on an antenna mast.
(Source: pa picture alliance / Alamy Stock Photo)

"Deconsolidation makes total sense to me" asserted Höttges at the Morgan Stanley TMT event. "I always said that by the way. I always said a minority IPO path doesn't make sense."

Deutsche Telekom’s CEO went on to make the case for an industrial solution, "but I always need two to tango." He added that he was "open" to partners. "Let's find a good logic for this," said Höttges.

Vodafone thinking along similar lines

Höttges choice of language chimed with Nick Read’s, Vodafone CEO.

Speaking on the company’s H1 earnings conference this week, Read did not rule out the possibility of deconsolidation for Vantage Towers, its European tower company spinout that it listed on the Frankfurt Stock Exchange in March (but still holds a majority stake).

Deconsolidation, said Read, can "optimize" capital structure. He talked enthusiastically, like Höttges, about "co‑control with a like-minded industrial player."

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Vodafone’s CEO referenced Deutsche Telekom and Orange as two "really credible, really high-quality operators that we have a very strong relationship with," and that both were potentially attractive "industrial partners" for a tower company hook-up in Europe.

Höttges, speaking on the company’s Q3 earnings conference call this week, also took time to detail the operator’s strategic thinking on towers.

After ruling out the 'take the money and run' option (taken by Telefonica with its tower sale to ATC), he added: "We highly prefer the option of having a strong partner who is working with us going forward. And I even prefer the deconsolidation of that asset, that this company is entrepreneurial, independent of, let's say, participating in the growth of the 5G build-out, and the edge cloud environment."

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— Ken Wieland, contributing editor, special to Light Reading

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