Like so many other operators around the world, Orange is looking to capitalise on its valuable passive infrastructure assets
Back in December 2019, Orange announced its Engage 2025 strategic plan, aiming to cater for an increasingly digital world in a fair and sustainable way. Part of this plan included reinventing the company’s operator model, including the restructuring of its tower assets.
Now, Orange is creating an entirely new tower company, with the aim of maximising the value of its passive infrastructure
The company, called TOTEM, will contain around 25,500 sites in France and Spain, Orange’s two largest European markets. The majority of these sites (around 17,000) will be in France, 55% of which are tower sites, with the remainder being rooftop sites.
In Spain, the sites are split almost evenly between tower and rooftop sites, with TOTEM notably also benefiting from a network sharing agreement between Orange and Vodafone.
In the last year, Orange suggests that these assets would have generated over €500 million in revenue, around two thirds of which comes from France, where Orange predicts strong revenue growth.
Orange said that they would plan on fostering organic growth, being prepared to add up to 3,000 more sites over the next eight years, depending on demand.
TOTEM will be independently managed by a team that will be appointed in the first half of this year. Operations themselves are expected to launch by the end of 2021.
“Passive mobile infrastructure is a core asset for Orange, benefiting from exceptional operational expertise in the areas of deployment, hosting and maintenance. We are determined to keep these strategic assets within the scope of the Group,” said Stephane Richard, chairman and CEO of Orange Group.
Orange is the latest in a long string of operators who are spinning off their passive infrastructure in order to make the most of the incredible demand being experienced for such assets over the last year. For example, at the start of this year Vodafone said it would put its 50% stake in Cornerstone, its UK towers joint venture with Telefonica, into its new European infrastructure unit Vantage Towers; since then, Vantage has incorporated Vodafone’s towers from ten European markets, seeing its overall portfolio swell to 82,000 macro sites.
Vantage Towers is to be taken public in March with a share offering worth about €3 billion.
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