Telefónica Deutschland to sell 10,100 sites to Telxius

Germany operator confirms plan to sell mobile sites to Telefónica-owned tower unit for €1.5 billion.

Anne Morris, Contributing Editor, Light Reading

June 9, 2020

3 Min Read
Telefónica Deutschland to sell 10,100 sites to Telxius

Telefónica Deutschland confirmed it will sell around 10,100 mobile sites to Telxius for a sum of €1.5 billion ($1.69 billion), although the German operator stressed it will retain ownership of the active radio technology located at the sites.

The move had been anticipated and involves the transfer of mobile sites that are situated mostly on rooftops. The transaction, which is subject to approval and expected to be completed by August 2021, will also see Telxius develop an additional 2,400 sites over the next four years and lease them back to Telefónica Deutschland under a long-term agreement.

Along with the extra funding, the operator said it is securing access to key locations for the rollout of its 5G network. Markus Haas, CEO, said this is "one of the largest and most important transactions in the history of Telefónica Deutschland." Haas recently indicated that the operator will launch its 5G network in the second half of 2020. (See Telefónica Deutschland confirms 2020 outlook after Q1 growth.)

The sites will effectively remain within the Telefónica Group: the Spanish parent owns 50.01% of Telxius, which manages the operator's telecom towers and subsea cable assets. The other shareholders are KKR (40%) and Pontegadea. Telxius also forms the cornerstone of Telefónica Infra, the new division created in 2019 to focus on the "development and monetization" of infrastructure assets including towers. Telefónica Group said the transaction will reduce its net debt by approximately €500 million ($562.7 million) between 2020 and 2021. (See Telefónica unveils major new strategy, identifies €2B in new revenues.)

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Once the transaction has been completed, Telxius said its tower portfolio will exceed 32,800 sites in the six countries where it operates, "doubling its size since Telxius was created in 2016." Of these sites, around 80% are located in Europe (Spain and Germany), while the remaining portfolio is in Latin America (Brazil, Peru, Chile and Argentina). Telxius Towers Germany will increase its portfolio more than six-fold to almost 15,000 owned sites.

Telefónica is of course not the only operator to be attempting to monetize its infrastructure assets to fund 5G networks and future growth: In July 2019, Vodafone unveiled plans to spin off its European towers into a separate company that could be listed or partly sold in the subsequent 18 months. Vodafone's European towers company is now operational and comprises about 62,000 European towers. Vodafone CEO Nick Read previously estimated this company could be worth as much as $20 billion. (See Vodafone shares soar as it values towers spin-off at $20B.)

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— Anne Morris, contributing editor, special to Light Reading

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About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

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