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The deal will see Veon offload 100% of its tower subsidiary National Tower Company (NTC) to Service-Telecom for $970 million
Today, global connectivity player Veon has signed a new agreement to offload the entirety of their Russian mobile tower portfolio to infrastructure specialist Service-Telecom.
The deal, valued at around $970 million, will see Service-Telecom gain full ownership of Veon’s Russian tower unit NTC, comprising around 15,400 mobile towers across the country.
This move builds on Service-Telecom’s existing partnership with Veon’s Russian operator subsidiary PJSC VimpelCom, better known by their brand name Beeline, whom they already provide with passive infrastructure across numerous Russian regions.
As part of the deal, the active network infrastructure currently operated by Beeline and most of the rooftop towers will remain with the company.
Service-Telecom will also continue to provide tower infrastructure services for VimpelCom for an eight-year period, with multiple eight-year extensions available at VimpelCom’s discretion. Two pair will also build up to 5,000 additional sites by 2029 depending on demand.
For Veon, this deal represents the latest move in the company’s drive to monetise their infrastructure portfolio to further invest in network rollout and technology upgrades.
In total, the company currently operates over 50,000 towers in nine markets.
“Today’s transaction is a major step forward in realising the value of VEON’s infrastructure portfolio for our shareholders. By entering into a long-term partnership with a strong, experienced counterparty in Russia, Beeline will enjoy the operational and financial flexibility to serve its customers with market-leading services through one of the nation’s largest and most technologically advanced mobile networks,” explained Veon’s CEO Kaan Terzioglu. “Moreover, this transaction allows to release the capital to deleverage VEON’s balance sheet and invest in critical aspects of active network and digital opportunities while achieving more financial flexibility.”
As always, the deal is subject to standard regulatory approvals, with the companies expecting the deal to close before the end of the year.
Tower sales are being seen at scale all over the world in recent years, with operators racing to monetise their infrastructure assets to pay for expensive network expansions.
Just last month, infrastructure giant Cellnex agreed to a €209 million purchase of around 700 mobile towers in Portugal, adding to their already sizable portfolio in the county, where they own around half of all tower infrastructure. However, despite the company’s massive M&A conquests over the last couple of years, it still faces significant regulatory hurdles in a number of markets, most notably in the UK, where a Phase 2 investigation by the Competition and Markets Authority is currently ongoing.
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