Eurasia: Turkcell submits a binding offer for TeliaSonera’s stake in FINTUR
TeliaSonera intends to divest its stake in FINTUR, the mobile business it owns with Turkcell in Kazakhstan, Azerbaijan, Georgia and Moldova. With Turkcell already owning a 41.45% stake in the company, it has submitted a binding offer to acquire TeliaSonera’s stake. In an interview with TowerXchange, Turkcell’s CSO suggested the company felt it could create more value for their shareholders and customers if they took a bigger role in the management of their subsidiaries in the region.
France: Orange takeover of Bouygues Telecom collapses
After entering into official negotiations in January, Orange’s takeover of Bouygues Telecom has collapsed with parties failing to reach an agreement regarding the consolidation. Bouygues Telecom’s revenues had been hit by the entrance of FREE mobile into the French market which led to a price war. The entrance of FREE had previously also ben a factor in the takeover of Vivendi’s SFR by Altice’s Numericable.
France: ARCEP proposes curtailment of network sharing agreements
French telecoms regulator, the Regulatory Authority for Electronic Communications and Posts (ARCEP) has proposed the curtailment of network sharing agreements between Orange and FREE mobile and between SFR-Numericable and Bouygues Telecom. The move is designed to stimulate what the regulator calls crucial investments into telecoms infrastructure in the country.
Germany: American Tower seeks minority investor
Investors including Blackrock have been approached regarding acquiring a potential 10-20% stake in American Tower Germany. With the European tower industry starting to open up and sizeable portfolios potentially coming to market, such investment could well be used to fund acquisitions and extend their footprint of 2,028 towers in the continent.
Germany: Telefónica Deutschland sells towers to Telxius
Following the restructuring of its Spanish and Latin American assets into infrastructure business Telxius, Telefónica has announced the sale of its 2,350 German towers to the subsidiary for a cash price of €587mn (€249,787 per tower). The are no plans for a sale of the remainder of their estimated 12,000 sites – the majority of which believed to be rooftops – to the entity.
Germany: Deutsche Telekom brings in advisors to look at a spinoff or IPO of infrastructure
Deutsche Telekom has reportedly appointed advisors to look into a potential IPO or spinoff of their infrastructure assets. Deutsche Telekom’s 27,000 towers (of which 8,000 are ground based towers) are managed by their infraco Deutsche Funkturm. Talks regarding a potential sale or IPO are said to be in the very early stages and it has yet to be clarified which assets may be included in such a transaction.
Italy: EI Towers and Cellnex/ F2i still in the running for INWIT
The sale of a stake in Telecom Italia’s INWIT is still ongoing with Italian broadcast towerco EI Towers and Spanish towerco Cellnex (in conjunction with F2i) the two shortlisted bidders. EI Towers favour a smaller 25% stake with the deal thought to include the transfer of 1,000 EI sites to INWIT, whereas Cellnex prefers a larger stake - seeking the initial 45% of equity on offer and following this with a takeover of the entire share capital. In addition to the complexities of the bids, the deal process has been further slowed by the resignation of Telecom Italia CEO, Marco Patuano. Announcements are expected in mid May. Both the Cellnex and INWIT CEOs have intimated that a Cellnex takeover would afford greater synergies; whilst other reports suggest that the recent alliance of INWIT and EI Towers shareholders, Vivendi and Mediaset - could favour the Italian company’s bid.
Italy: Rai Way and EI Towers merger talks to reopen?
After the Italian government blocked EI Towers’ attempted takeover of rival broadcaster Rai Way amidst competition concerns, EI Towers have told media that they have not given up on the possibility of an acquisition. EI Towers continue to build their infrastructure portfolio in Italy through the rolling up of smaller.
Italy: EC competition authorities study Wind – 3 Italia merger
Competition authorities at the European Commission have launched a full investigation into the proposed merger between VimpelCom’s Wind and Hutchison’s 3 in Italy. Such a merger would likely put the new entity in poll position in the Italian operator market but competition authorities have voiced their concerns that it could lead to “higher prices, less choice and reduced innovation for mobile customers in Italy.”
Italy: INWIT finalises the acquisition of 76 towers in Lombardy
INWIT has finalised the purchase of 76 telecom towers in Lombardy, mainly located in the province of Brescia. The transaction, was achieved through the acquisition of three companies Gestione Due S.r.l., Gestione Immobili S.r.l. and Revi Immobili S.r.l. for a total amount of €7.9mn.
Kazakhstan: Tele2 and Altel form joint venture
Sweden’s Tele2 and Kazakhtelecom’s Altel have announced that they will be joining forces in the Kazakh market. The move is part of a strategy to close the gap on number one and number two operators K’cell and KaR-Tel (Beeline), although the merger will still leave the new entity some 14-17% short of its rivals’ market shares.
Poland: Emitel seeks refinancing
Polish broadcast towerco Emitel, with a portfolio of 370 sites, is reportedly seeking refinancing. The company has recently invested capital to add fibre to its towers, a strategy which other players in the market are likely to follow.
Romania: Orange and Telkom sign agreements for infrastructure sharing on fixed and 4G networks
Orange and Telkom Romania have signed two separate agreements governing fixed and 4G networks in the country. Orange, which currently does not have fixed internet infrastructure in Romania, will gain access to Telkom’s network, whilst Telkom will be able to use Orange’s 4G network which is the most extensive in the country. The deal is seen as win-win for both parties, as Orange would have to invest massively to create its own fixed broadband network while Telekom has a lot of catching up to do on 4G data coverage.
Russia: VimpelCom and MegaFon sign RANsharing agreement
VimpelCom and MegaFon have announced a partnership to construct, operate and share RAN infrastructure across ten regions in Russia in a bid to more cost effectively rollout their 4G networks. The agreement will be the largest network sharing partnership in the country and will involve the deployment of over 1,300 additional base stations.
Russia: MTS creates their own towerco
MTS has made 5,500 towers, approximately half their portfolio, available for commercial lease through MTS Towers. There is no indication that this is the first step toward the monetisation of the assets. In contrast, VimpelCom has consolidated their 10,400 towers into National Tower Company, in advance of a sale and leaseback, the process for which is drawing to a close. MegaFon has also carved out their 14,000 towers into First Tower Company, explicitly stating their intent to sell to a strategic acquirer.
Russia: Russian Towers, RDIF and Vertical emerge as frontrunners to secure VimpelCom towers
As the process to sell VimpelCom’s Russian towers draws toward a close, two local towercos and Government fund RDIF have emerged as frontrunners. Russian Towers are backed by the EBRD, UFG Private Equity, Macquarie (specifically MRIF), ADM Capital, Sumitomo Corporation and the IFC and have built over 1,800 towers plus hundreds of lamp-post solutions in the country. Privately-owned startup Vertical have raced to a portfolio of 1,600 towers and lamp-posts. It seems increasingly unlikely acquiring investors will have an appetite for VimpelCom’s rooftop sites, which may have been included to boost the deal valuation – VimpelCom are thought to be holding out for a valuation north of $600mn.
Spain: Zegona fail to secure funding for Yoigo acquisition; MASMOVIL offer back on the table
UK based Zegona Communications has reportedly failed to secure the funding required for a reported £630mn takeover of TeliaSonera’s Yoigo. After having been outbid by Zegona previously, Grupo MASMOVIL’s €550mn offer is now reportedly being reconsidered by TeliaSonera, although it is yet unknown whether TeliaSonera will grant Zegona additional time to secure the necessary funding to support their higher offer.
Spain: Reports suggest Telxius could IPO in July
TMTfinance report that Telefónica will IPO Telxius in July 2016, seeking a €4-6bn valuation. Over 16,000 towers have been injected into Telxius, which makes 40% of revenue from the tower business and 60% from submarine cable. For more information, see our detailed analysis of Texius later in this Journal.
Turkey: Turkcell announces IPO of Global Tower business
Turkcell has announced their intent to IPO its infrastructure unit, Global Tower. Turkcell has a portfolio of 23,000 sites including ~8,000 macro towers in Turkey. An IPO of the unit is somewhat complicated by the Build-Operate-Transfer agreement in place with the Turkish government on the original towers. See TowerXchange’s Turkish market analysis and Turkcell interview later in this edition for further details.
UK: Hutchison takeover of Telefónica O2 on the brink of collapse
The European Commission is reportedly on the verge of blocking Hutchison’s planned takeover of O2 amidst concerns about loss of competition in the market. In spite of the numerous concessions proposed by Hutch it is thought that they have been unable to alleviate the concerns of the competition authorities. With Telefónica’s net debt sitting at €49.92bn as of the end of 2015, they are thought to be looking for new buyers, with cable company Liberty Global and a number of private equity firms thought to be interested parties.
UK: WIG secures investment from 3i
The UK’s Wireless Infrastructure Group has secured £75mn in investment from 3i Infrastructure. 3i joins Wood Creek Management as shareholders in the company and takes WIG’s total capital raised up to £1bn. The funds will be used to not only scale up WIG’s infrastructure footprint in the UK but also to expand their present into other Western European markets.
UK: Arqiva restructuring could re-open the door to US strategics
The ongoing strategic review of Arqiva could re-open the door to previous owners Crown Castle, or their competitors American Tower, to enter the UK market. Arqiva has around 10,550 active towers and a tenancy ratio of 2.5, but the consortium of current owners, led by CPP and Macquarie, could use the current balance sheet restructuring exercise as an opportunity to exit. An IPO has also been rumoured, with a valuation north of £2bn mooted.
Ukraine: lifecell sells 811 towers to infraco subsidiary UkrTower
lifecell, Turkcell’s Ukrainian subsidiary, has announced a sale and leaseback transaction of 811 towers to UkrTower, their wholly owned subsidiary in the Ukraine for a reported US$52mn. Whilst the transfer was made in part to improve the management of their towers, it will also be part of Turkcell’s broader strategy to monetise infrastructure assets
