Swiss telco offloads 2,239 towers; will use bulk of proceeds to pay down debt.

Switzerland’s Sunrise Communications this week sold its towers business to a consortium led by Spanish infrastructure firm Cellnex.

Cellnex and its partners – Swiss Life Asset Managers and Deutsche Telekom Capital Partners – have agreed to pay 500 million francs (€458.8 million) for Swiss Towers, Sunrise’s wholly-owned subsidiary, which manages its portfolio of 2,239 telecom towers.

"Like all other major European countries, the industry in Switzerland is facing the challenge of meeting the significant growth in mobile data consumption and transmission by incorporating new technologies based on small cells and distributed antenna systems (DAS), which in the medium term will mean densifying networks by rolling out new equipment in parallel with reducing the overlap of some of the already rolled out networks, essentially 2G and 3G," said Cellnex CEO Tobias Martinez, in a statement on Wednesday. "This market development provides a clear opportunity for Cellnex Telecom."

The sale "enables us to continue our network and innovation leadership," said Sunrise CEO Olaf Swantee, in a separate statement.

As part of the sale, Sunrise has entered into a long-term service contract with the consortium, which includes a build-to-suit programme for new macro sites and small cells.

"The new partnership will enable us to focus even stronger on the key differentiating elements of our active network infrastructure to deliver the defect-free network and set new industry standards in the Swiss mobile market," Swantee said.

Sunrise said it will use CHF450 million of the proceeds to pay down debt and improve its financial position, in a bid to reach an investment grade credit rating in the near term.