Key takeways from Meetup Europe 2023 towerco keynotes

Earlier this month, over 400 people gathered in London at TowerXchange’s 7^th edition of the European Meetup which was packed with content and 80 speakers. At Europe’s biggest telecom tower industry event we covered 5G use cases, regulation, energy, sustainability, M&A and much more. We kicked off both days with CXO keynotes from some of the continent’s most prominent towercos discussing their plans, priorities and their visions for the industry. Read on to find out what they are.

Bruno Jacobfeuerborn, the CEO of GD Towers and its German arm Deutsche Funkturm spoke first on stage. The towerco which used to be in the MNO-owned column, has now become independent following the completion of a deal earlier this year which saw Deutsche Telekom (DT) sell a 51 % stake to DigitalBridge and Brookfield for EUR 17.5 bn. With a footprint of over 40,000 sites across Austria and Germany, Bruno shared it has an ambition to grow organically and inorganically. DT is GD Towers’ anchor tenant, and 25% of their customers already are 3^rd parties.

Jacobfeuerborn recognises the towerco is well positioned in their markets - constantly growing with 5 new sites or 20 site extensions a day, and many ground-based towers which can also be marketed to other MNOs. In addition, they provide full tower services and have lots of in-house capabilities.

Bruno stated that ESG is central to their strategy – the towerco uses 100% green energy and is keen to explore other energy solutions such as hydrogen. Other strategic priorities for the towerco are BTS and network extension, revenue growth and digitalisation and cost-efficiency. The towerco also looks forward to opportunities and working together with other European towercos.

Vivek Badrinath, CEO, Vantage TowersVivek Badrinath, the outgoing CEO of Vantage Towers was next on stage who noted that after a short and sweet listed journey, the pan-European towerco was part of a transaction through which a consortium formed of Vodafone, KKR and GIC (Oak Holdings) took ownership of the company and is taking it private. The new ownership, a 50:50 combination of Vodafone and KKR/GIP, will focus on organic growth and tenancy.

For Vantage Towers any passive or shared infrastructure on a site where they can create value for their customers is important. Vivek shared that the DAS/IBS model will be their focus as it gives extra capacity and ensures win-win partnerships between MNOs, towercos and venue operators all for the benefit of the end-user. Vantage Towers will be exploring public safety networks and IoT which would see more rollouts across Europe coming.

With a strong BTS programme already taking place, and a ground lease buyout programme planned, Badrinath shared there is also a future M&A pipeline. One of the towerco’s strengths is it being a multi-country towerco which allows them to operate efficiently using different local resources. Having a multi-country platform will help them expand.

Badrinath stressed the towerco’s increased environmental consciousness of everything they own, helping MNOs improve their energy efficiency where power costs have hit their PNLs. In addition, Vantage have worked and will continue working on the acceptability of towers for local communities within the Towers for Good programme under CCO Sonia Hernandez’ leadership.

Vivek wrapped up by sharing his vision the industry will enter the Age of Reason which will include a focus on operational efficiency and BTS and entering the industrial age for the industry.

Representing Phoenix Tower International (PTI) was Scott Lewis, Vice President, Next Generation Solutions. PTI is 10 years old this year and having identified a market where they could be a leading tower company for their partners, they have achieved presence in 20 countries in Europe and in North and South America. Having achieved scale, the towerco focuses on operational efficiency at present. It has changed its focus on raising capital in a structure that reflect interests of long-term investors, as well as on ESG as the towerco has a mission-critical focus on making a difference in their communities.

Noting that 5G is being addressed in Europe differently than in other markets, Lewis stated he sees opportunities to partner with MNOs to bring 5G and IBS to areas where there is no connectivity as this means bringing solutions to customers and helping them. Lewis admitted DAS offers a three- way value in a shared infrastructure model but it’s difficult to do and uptake so far has been only in most important venues. The new 5G bandwidth will require DAS, presenting new opportunities and for Mobile Private Networks (MPN) as well. PTI have explored B2B opportunities for MPN but note that the role of towercos in this business model has yet to be fully defined. Despite there being MPN trials in the industry, it’s still early days for PTI and there is more to come.

Lewis shared PTI’s excitement about the upcoming opportunities in France, where they have entered as a smaller towerco but are growing their presence through the transfer of towers from Cellnex which is expected to continue into 2024. Being one of the towerco’s largest and most important markets in Europe , they see opportunities to build effective new towers and go where the customer wants.

Lewis concluded by mentioning PTI invests in opportunities to serve customers through its foundation, holding charity events and working with local organisations in all markets to ensure the tower industry is known as a valuable corporate citizen. While in the US towercos don’t focus on this, in LATAM and Europe, PTI has seen this makes a difference and resonates with customers.

Tobias Martinez, outgoing CEO, CellnexTobias Martinez shared Cellnex’ Q1 2023 results show a solid 7% organic growth with revenues reaching near EUR 1bn, and the towerco being on the right track to achieve 2023 goals and 2025 guidance. In addition, the towerco is on strack to achieve investment grade as soon as possible.

For Cellnex, first priority is to improve organic growth in existing companies, the towerco won’t be continuing M&A expansion right now. Martinez suggested there could be smaller ones in specific countries where they see opportunities to consolidate their presence, however keeping to its main objective to deleverage the company to hit investment grade is key.

Looking back 8 years ago when he became Cellnex’ CEO and when adoption of the tower model was a question mark in the market, Martinez reflected that towercos have demonstrated the model works and that sharing infrastructure works, becoming a proven model. He is optimistic all towercos will have a lot of opportunities to extend their role in the value chain.

As RAN sharing is happening now, still on a very small scale, towercos will see an opportunity to become a new partner in the infrastructure chain. Martinez noted that Cellnex always follows the pace of customers, not trying to accelerate when the model isn’t proven and the customer isn’t ready.

Focusing on their existing 12 countries, Cellnex are optimistic there are opportunities for the towerco to expand core tenants per country.

Martinez shared his belief that telecom infrastructure companies are ESG by definition, helping customers reduce power consumption and become more efficient through infrastructure sharing. Cellnex is always reducing environmental impact, at present sourcing 80% renewable energy and has a net-zero goal by 2050. The towerco will focus on female empowerment – 30% of roles are held by women but Martinez admitted that was not enough, and there is work underway to reach 50:50 parity. In the towerco’s current board structure 55% are women, the chairman is a woman, but more women have to be attracted to the sector.

Tobias Martinez concluded that Cellnex has grown with the tower industry where towercos are key players in the transformation stage of digitalisation. Now there are good competitors and a healthy sector, making huge investments to develop digitalisation and help customers.

Nicolas Roy, CEO, TOTEM GroupThe last towerco keynote was with Nicolas Roy, CEO of TOTEM Group, one of Europe’s youngest towercos with presence in France and Spain.

Roy reflected on great business success the company has managed to achieve in the past 18 months since its creation – building 5G-capable connectivity network of the line 15 south of the metro in Paris, the 5G network of the Orange Velodrome stadium and the deals with Telefonica in Spain and Iliad in France.

TOTEM’s CEO also shared its ambitions in the small cell segment which is becoming a real growth field for towercos with TOTEM taking part in this evolution in Spain and in France.

In addition to focusing on 5G monetisation and exploring new technologies, TOTEM shared their ESG priorities which include working in partnerships with municipalities, councils and communities to accelerate the deployment of digital infrastructure.

Using the opportunity to come back on everything TOTEM accomplished, Nicolas Roy concluded that the future looks exciting for the towerco which will be exploring the neutral hosting model further.