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Eurobites: Vodafone Pockets $2.3B From New Zealand Sale

Iain Morris
7/31/2019

Also in today's EMEA regional roundup: Openreach plays along with BoJo's broadband dream; Fastweb gets fifth Italian mobile license; Digital Realty to build new Frankfurt facility.

  • Vodafone collected NZ$3.4 billion ($2.3 billion) after flogging its New Zealand business to a consortium comprising Infratil, a local infrastructure investment company, and Brookfield Asset Management. The deal, first announced in May, will help the UK-based operator to slash borrowings amid concern about leverage. Vodafone has spent heavily on 5G spectrum licenses in recent months and has just concluded an €18.4 billion ($20.5 billion) deal to buy European cable assets currently owned by Liberty Global. The fee it will receive for Vodafone New Zealand -- which is to continue using the Vodafone brand -- equals about 7.3 times the operator's adjusted annual earnings (before interest, tax, depreciation and amortization), said Vodafone in a statement. (See Vodafone Shares Soar as It Values Towers Spin-Off at $20B and Vodafone Gets Blessing for €18.4B Liberty Takeover.)

  • All hail Boris Johnson. The UK's new prime minister believes he can put the great back into Great Britain through the power of positive thinking. Besides envisaging a glorious economic future outside the European Union, he has also been gushing about his dream of ubiquitous all-fiber networks by 2025. No one seriously believes it, but broadband companies would rather play along than tell the boss he's bonkers, and risk being derided as killjoy Remoaners. After CityFibre paid tribute to the BoJo scheme last week, it was today the turn of BT's Openreach business. "The government wants to see a nationwide full fiber network and we're keen to lead the way in helping them to achieve that," said Openreach CEO Clive Selley in a statement, weeks after calling BoJo's plan a "stretch target" at an industry event. "Openreach will need to be at the front doing the heavy lifting, so we're working hard to build a commercially viable plan." Openreach has accordingly announced 36 new locations where it will start building all-fiber networks, and has now hired 2,600 of the 3,000 trainee technicians it aims to recruit this year. Its plan? As in the BB (before BoJo) era, that's to cover 4 million properties by 2021 and to think about covering 15 million by 2025 if investment conditions are good. Just another 10 million or so properties for others to hook up, then. (See BoJo Leadership Threatens Huawei & UK's Fiber Future.)

  • Italy's phone regulator has delivered another sharply aimed kick to the country's mobile operators, which were already gurgling on the floor like a partygoer after too much grappa. According to this Bloomberg story, broadband operator Fastweb has just secured Italy's fifth mobile license and will build its own 5G network. The move -- now confirmed by an official statement from Fastweb -- comes after last year's licensing of Iliad, one of Europe's most aggressive service providers, as Italy's fourth mobile operator. It also follows a splurge on 5G licenses last October, when a government auction raised €6.55 billion ($7.3 billion), €4 billion ($4.5 billion) more than expected. Due to report second-quarter results later this week, Telecom Italia recorded an 11.4% year-on-year drop in Italian mobile revenues for its first quarter, and has been forced into a network-sharing deal with rival Vodafone to fund its 5G rollout. Vodafone, which is also slashing 17% of jobs at its Italian subsidiary, last week reported a 4% drop in Italian revenues for the June-ending quarter but said "market conditions continued to improve." It may want to rethink that assessment. (See No Italian Job for 1,130 Vodafone Workers and Italy's $7.6B 5G Bonanza Puts Telcos on the Rack.)

  • US-headquartered Digital Realty, a data center provider that made about $3 billion in revenues last year, looks set to open another facility near the German city of Frankfurt after signing an agreement to acquire 34 acres of land in Hattersheim, about three miles from Frankfurt Airport. The company already has two facilities in the Frankfurt area but says local demand for its services is still growing. "Frankfurt is a critical connectivity hub for our customers in Europe, and this strategic land acquisition demonstrates our long-term commitment to securing our supply chain and supporting our customers' growth across the region," said CEO A. William Stein in a prepared statement. The real estate deal is subject to various closing conditions, including the receipt of planning permissions, but Digital Realty plans to begin work on a data center that can deliver up to 84 megawatts of IT capacity as soon as the agreements are finalized. The company also operates data centers in Amsterdam, Dublin, Geneva, London, Manchester and Paris.

    — Iain Morris, International Editor, Light Reading

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