Vantage Towers, which Vodafone plans to float on Frankfurt’s Deutsche Börse later this month, is a play by Vodafone to get a foothold in the European network infrastructure market, and Vodafone and Telefonica have announced that they plan to roll their joint-owned tower infrastructure company – Cornerstone, which has 14,300 towers – into Vantage, making Vantage a more attractive proposition for investors when the IPO takes place.
Vodafone UK and Telefonica UK said today that the companies entered into long-term Master Services Agreements (each, an "MSA") with Cornerstone, which have initial terms of 8 years from 1 January 2021, with three 8-year renewal periods, and which establish Cornerstone as a preferred supplier of new sites for both operators.
This means Vantage can further strengthen its position supplying 5G towers, having added two major accounts to its books ahead of its flotation, hopefully making it a more valuable proposition for those looking to invest in 5G stocks.
“Cornerstone is a great addition to the Vantage Towers portfolio,” said Vivek Badrinath, Vantage Towers Chief Executive. “Cornerstone is exactly the type of high quality grid we like to own: a number one market position, and two strong anchor tenants with network sharing agreements in place for whom we are the preferred supplier. We look forward to working with our anchor tenants to power the UK's digital transformation, enabling the roll-out of 5G networks to benefit business and consumers and ensuring greater mobile coverage for all.”
Vantage Towers in Europe
Vodafone owns 62% of Vantage Towers, which was launched last year as Vantage Towers Greece, when Vodafone Greece and Wind Hellas Telecommunications SA combined their tower infrastructure assets (the remaining 38% of Vantage is owned by Crystal Almond, the controlling shareholder of Wind Hellas). And it is hoped that Vantage Towers will draw investment as 5G towers and infrastructure become increasingly critical in delivering new networking services across Europe.
“Vantage Towers marks significant progress of the strategy I established when I became Vodafone CEO, specifically relating to the key pillar of improving asset utilisation,” Vodafone CEO Nick Read said, when the Vantage partnership happened last year. “Vantage Towers will also unlock further value for shareholders, notably through the IPO targeted for early 2021. As Europe’s leading mobile and fixed services provider, we have now created Europe’s leading tower infrastructure company, which will play a central role in enabling Europe’s sustainable and inclusive digital society.”
By moving Cornerstone assets to Vantage Towers, Vodafone will create the number one tower infrastructure company in the UK, which will operate approximately 14,200 macro sites and 1,400 micro sites. And the move will extend Vantage Towers' portfolio to approximately 82,000 macro sites across Europe, with a geographic presence in 10 European markets.